On Wednesday 27 October 2021, the Chancellor Rishi Sunak delivered the 2021 Autumn Budget. In this update, we summarise the key points.
1 – National Living Wage rise
The National Living Wage will increase from £8.91 per hour to £9.50 per hour from April 2022. This marks a 6.6% increase for those aged 23 and over.
For those working a 40-hour week, the new minimum annual salary will be £19,760.
2 – Housing
£1.8 billion is being allocated for the development of 160,000 new homes on derelict or unused sites – known as brownfield sites – in England.
£65 million is to be attributed to ‘digitising’ the planning system in England.
3 – Transport
The Government has announced that England’s city regions will receive £6.9 billion to improve transport infrastructure including trains, tram, bus and cycle projects. Scotland, Wales and Northern Ireland will receive additional funding based on the Barnett formula.
4 – Health
The Chancellor has announced a £5.9 billion initiative in an effort to tackle the backlog of people awaiting tests and scans including £2.3 billion for diagnostic tests, £2.1 billion to improve Information Technology across the NHS and £1.5 billion for bed equipment and surgical hubs.
5 – Education
The Government will spend £2.6 billion on the creation of 30,000 new school places for children with special educational needs and disabilities. £1.6 billion will be allocated to roll out ‘T-levels’ for 16-19 year olds in England alongside £550 million for adult skills. £830 million will be attributed to modernising colleges in England.
£3.8 billion will be invested in skills and the Chancellor has set out a new national numeracy programme to improve maths skills for adults.
6 – Business Rates
The Chancellor expects to cut business rates by £7 billion alongside a 50% discount (up to £110,000) on business rates for hospitality, retail and leisure businesses.
7 – Families and children
£500 million will be allocated to supporting English parents and children. This includes £200 million for families with complex issues, £100 million for mental health support for expectant parents, £82 million for parent advice centres and £50 million for breast feeding support.
8 – Universal Credit
A major tax cut was announced with the taper rate on universal credit being reduced from 63% to 55%, a much higher level than expected.
9 – Theatres, Galleries, Libraries and Museums
To support theatres, galleries, libraries and museums, the Chancellor is investing £850 million, while the Government will review museum freedoms and extend the tax relief for museums and galleries.
10 – Air travel
The Government will cut taxes on internal flights within the UK from April 2023 onwards. The aim is to cut the cost of travel by half for 9 million people.
11 – Research and Development
The Chancellor said the target to increase Research and Development investment to £22 billion will be reached in 2026 to 2027. Tax relief will be expanded to include cloud computing and data costs and the objective is to make the UK a science and technology “superpower”.
12 – Fuel Duty frozen
The Chancellor has announced the planned rise in fuel duty will be cancelled. After 12 consecutive years of frozen fuel duty rates, the average car driver will now save a total of £1,900.
13 – Crime
The Chancellor has announced a £3.8 billion plan towards building prisons, £2.2 billion to be spent on the justice system and the recruitment of 20,000 new police officers.
14 – Alcohol Duty
The Chancellor has announced plans to simplify alcohol duties, based on a system of “the stronger the drink, the higher the rate”.
The Chancellor expects inflation to reach 4% over the next year. The OBR expects growth to be quicker than initially forecast at 6.5% in 2021 and 6% in 2022. Borrowing is set to fall as a percentage of GDP from 7.9% this year to 3.3% next year.
For more information on the 2021 Budget and how it may impact you or your business, please contact us on 020 8858 6971.