Autumn 2021 Budget Highlights

Autumn Budget 2021

On Wednesday the 27th of October the Chancellor presented the second Budget for the year, setting out the Government’s tax and spending plans for the next three financial years.

Here is a summary of some of the changes that may affect your business:

Corporation Tax

From April 2023, corporation tax on profits over £250,000 will increase to 25%, while the rate for small profits under £50,000 will remain at 19%. There will be tapered relief for businesses that have profits between £50,000 and £250,000 to ensure that their average rate remains lower than the main rate. 

The Diverted Profits Tax rate will also increase to 31%.

Business Rates

There are several changes for business rates, including:

  • The business rates multiplier being frozen from 1 April 2022 to March 2023.
  • Introduction of a temporary business rate reduction of 50% for eligible businesses in retail, hospitality and leisure, up to a maximum of £110,000 per business cap.
  • Introduction of 100% improvement relief – this will provide 12 months’ relief from higher bills for occupiers, where improvements to an existing property increases the rateable value.
  • Extension of transitional relief for SME’s and the small business scheme, for an additional year.
  • An increase in the frequency of business rates revaluations from every 5 years to every 3 years, commencing in 2023.
  • Capital Allowances Annual Investment Allowance

The Annual Investment Allowance of £1 million will be extended until the 31st of March 2023.

Health and Social Care Levy

As announced previously, a new Health and Social Care Levy will be introduced from April 2022.  This 1.25% levy will be applied UK-wide to all National Insurance contributors that fall under Class 1 (Employee, Employer) and Class 4 (Self-Employed), as well as to the main and additional rates.

The Levy will also apply to the earnings of working individuals that are above State Pension age.

National Living Wage

From 1 April 2022, the National Living Wage will rise by 6.6%, to £9.50 per hour for individuals aged 23 and over.

R&D Tax Relief Schemes

R&D tax reliefs will be extended to include data and cloud costs and will be amended to ensure that efforts are focused on not only encouraging investment in UK-based R&D, but also improve compliance and reduce abuse.

*This is not an exhaustive list of all changes proposed by the Chancellor.  To watch the full Budget Statement please visit

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