Autumn Budget in a nutshell
29 October 2021
Autumn Budget 2021
The greatly anticipated Autumn budget was bought to the table by Chancellor Rishi Sunak on Wednesday but how might it affect you, your business and your family? Read on for our brief guide to the main points raised in the Autumn 2021 Budget:
• Inflation will rise to approximately 4% in 2022 which is up by 0.9%
• Universal Credit taper rate cut from 63p to 55p, plus a £500 increase in the Work Allowance – to be put in place by 1st December 2021
• A reminder that National Insurance Contributions (NI) will increase by 1.25% from 6th April 2022 - this is to fund the NHS and social care
• National Living Wage set to increase next April to £9.50 an hour for those aged 23 and over (see table below for other rates)
• The fuel duty freeze remains
• A pay rise for public sector staff in April 2022
• The recovery loan scheme has been extended to June 2022
• 0% Savings rate band to remain at £5,000
• Adult and junior ISA limits to remain the same at £20,000 and £9,000
• Tax bands to remain frozen at April 2021 levels for 5 years
• Business rates multiplier has been frozen at 49.9p and 51.2p from 1st April 2022 until March 2023
• Personal tax threshold limits frozen until 2026
• 25% Corporation Tax rise from April 2023
• A 50% business rate discount for businesses in the retail, hospitality and leisure industries with a cap at £110,000
• Introduction of a 100% business rates relief for 12 months for firms to carry out improvements to premises from 1st April 2023
• Capital gains tax deadline for reporting and paying capital gains tax will increase from 30 to 60 days following completion
• A massive Alcohol costs shake up where higher strength drinks to have higher duties but lower strength drinks to be cheaper. The cost of a pint will also be cut by 3p
• Smoking costs to increase on both cigarettes and hand-rolling tobacco
• A levy on property developers of high-rise flats to pay for removal of dangerous cladding has been granted
• Libraries to be revamped and put back into action with new levelling up funds
• Extra funding will be provided for projects to support new parents
• A new programme called Multiply will be introduced to improve numeracy skills in adults
• Funding for school pupils will be put back to previous levels seen in 2010
• Internal domestic flights will have air passenger duty cut making it cheaper to fly within the UK
• Income tax applicable to dividends to increase by 1.25% from 6th April 2022
• Penalties for late submission and late payment of tax for Income Tax Self-Assessment come into effect from 6th April 2024 for those required to submit through MTD (all other taxpayers will be 6th April 2025)
• Residential Property Developers Tax (RPDT) will be charged at 4% on profit in excess of £25 mil
The Bank of England has cut the base rate to 4%. Find out what this means for trades and construction businesses, from borrowing costs to cash flow.
If you're a sole trader or landlord earning over £50,000 a year, big changes are coming your way. From April 2026, you'll need to comply with Making Tax Digital for Income Tax (MTD for ITSA) and while that might sound like it's a long way off, it’s closer than it seems. At Books and Business, we work closely with those in the trades and construction sector, and we know that admin is rarely top of the to-do list when you're running jobs, managing quotes, and keeping customers happy. But this change will affect how you keep records and report your income, so starting early is key. Lets get into what MTD for ITSA means for your business and more importantly how we can support you every step of the way.
Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) is coming, now is the time to get prepared! Whether you're a sole trader, subcontractor, or running a small limited company, choosing the right accounting software will keep you compliant and help you stay in control of your finances. But with so many options out there, how do you choose the best MTD software for your business? Here are some key features to look for: HMRC Compatibility The most important feature is that the software you choose is MTD compliant. It should link directly with HMRC so you can send updates digitally as well as meet other MTD obligations. Ease of Use Your time is best spent on-site, not buried in admin. Choose software that’s straightforward and suits your level of accounting knowledge. Look for mobile apps and dashboards that give you access on the go. Automation & Reporting The best systems will save you time by automating recurring tasks, like invoicing, expense tracking, and mileage logs as well as offering clear reports to help you understand where your money's going. Pricing & Scalability Think about where your business is headed. Can the software grow with you? Choose a platform that fits your budget now, but also supports features like payroll, CIS returns, or multiple users down the line. What are the most popular software options: QuickBooks – A popular option for trades and small business owners, offering strong mobile tools and CIS features. Xero – Great for real-time visibility, simple bank feeds, and job costing add-ons. FreeAgent – Perfect for sole traders and subcontractors, especially those who like things kept simple. Sage – Well-established and ideal if you’re looking for a more traditional setup with solid support. You’ve chosen the software but why make the switch now If you’re still using spreadsheets or a paper-based system, we cannot stress enough that now is the time to go digital . Getting ahead of the MTD deadlines gives you time to learn the software, avoid penalties, and work out any teething problems before submissions are mandatory. A quick note to be aware ...... some banks now include accounting software when you open a new business account. However, it’s advisable to do your research first to ensure the software they are offering meets your business needs. We can help with your MTD journey; we offer a variety of packages to suit each individual’s needs, from basic set up to regular training or just ad hoc training on any areas you may be getting stuck with, we also offer full packages where we can do it all for you. Get in touch for more information.
