The Effect of the Autumn Budget for Small Businesses

Boost for high street with 50% cut to business rates

In hope to ‘create stronger high streets’ and retain businesses Chancellor Rishi Sunak has announced in his Autumn Budget that there will be a 50% business rates for those in retail, hospitality and leisure businesses. This means that in the net financial year businesses will be able to claim a reduction of 50% in 2022-23 up to a maximum of £110,000. This will therefore support investment in property improvements meaning that businesses wont face higher rates for 12 months by taking ‘qualifying improvements’ to their property. This also looks to support the governments drive to encourage businesses to adopt green technology such as installing solar panels.

Fuel duty rise cancelled

It is confirmed that the fuel duty rise has been frozen for another year meaning that it will remain at 57.95 pence per litre UK wide for 2022-23. Sunak says that over the next five years the average car driver will save £1,900 after 12 consecutive years of frozen rates.

Extended Recovery Loan

 The Recovery Loan is going to be extended by 6 months until 30 June 2022. Businesses can apply for this loan for up to £2 million, 70% of this loan will be backed by the government. The backing of the recovery loan has reduced from 80% to 70%. Only 5,137 UK businesses have opted into the scheme so far, therefore it’s hoped that the extension will  give more businesses the chance to help their businesses recover after the pandemic.

Minimum wage increase

It was announced that as of the 1st April 2022 the new national living wage rate will increase from £8.91 per hour to £9.50 for those who are over 23 years old.

The national minimum wage rate will also rise, people aged 21-22 will see an increase from £8.36 to £9.18 and apprentices will also get an increase from £4.30 to £4.81.

Increases in National Insurance

One of the biggest announcements in the Autumn budgets was the vast increase in National Insurance which had previously been announced last month. The rate of National Insurance will increase by 1.25% in April 2022 in a bid for the government to pay social and health care across the country.

VAT increase to 20%

Despite there being many calls from businesses to keep the rate of VAT lower, they will be returning to pre-pandemic levels as planned in April 2022. These rates were previously lowered to 5% and then 12.5% to businesses in the hospitality and leisure industry during the pandemic.