Among the highlights isa new 50 percent business rates discount for businesses in the retail, leisure and hospitality sector, up to £110,000.

General economic status: GDP Growth is set to rebound and is now forecast to be 6.5% this year, up from 4% forecast in March’s economic and fiscal outlook. This will be followed by growth of 6% in 2022.

Underlying debt is forecast to be 85.2% of GDP this year, 85.4% of GDP in 2023 and 85.7% in 2024.

Inflation is set to rise to 4% over the next year but unemployment is expected to peak at 5.2% in 2022, lower than 11.9% previously predicted, and the UK economy is forecast to return to pre-Covid levels by 2022.

Business rates to reduce

Government’s stated aim is to “make the business rates fairer and timelier” – they will now be reviewed every three years.

The Government will reduce business rates in England by £7 billion over the next five years.  There will be a new one year 50% business rates discount for retail, hospitality, & leisure sectors, although there is a £110,000 cap.  Retail outlets e.g. dealerships and showrooms are advised to check with their local authority regarding eligibility.

• The business rates multiplier will be frozen for 2022-23
• From 2023, a new business rates relief will support investment in property improvements, so that no business will face higher business rates bills for 12 months after making qualifying improvements to a property they occupy. This is aimed at enabling businesses to adapt to meet rising demand and make improvements to their premises that support net zero targets and enhance productivity.
• From 2023, there will be exemptions for eligible plant and machinery used in onsite, renewable energy generation and storage, and a new 100% relief for eligible heat networks, to support the decarbonisation of buildings.

Business support

The Government is extending the temporary £1 million level of the Annual Investment Allowance to 31 March 2023.

The Recovery Loan Scheme will also be extended until 30 June 2022 with finance available up to a maximum of £2 million per business. However, the government guarantee will be reduced from 80% to 70%.

The Government has confirmed £1.6 billion for the British Business Bank’s Regional Funds to provide debt and equity finance to SMEs, and to expand the Regional Angels programme.

Corporate tax

An increase in the main rate of corporation tax to 25% from April 2023 was announced in March 2021.  There were no major changes in corporate or employment tax. For more information on corporate and employment tax implications in this Budget, see RSM’s blog.

Increase to the national living wage

The national living wage is to rise to £9.50 from 1 April 2022.  This is a 6.6% increase from the current living wage of £8.91 per hour for those aged 23 and over, which the government says will give full-time workers an extra £1,000 a year.  The minimum wage for younger workers will also rise.

Alcohol Duty

The planned increase duty on spirits has been cancelled.  In addition:

• A new, simpler alcohol duty system will be introduced, with the number of duty rates cut to six from 1 February 2023:
• Alcohol will be taxed in a progressive manner, with low strength products attracting low rates of duty and high strength products attracting higher levels of duty.
• There will be a 5% cut to duty on draught beer and cider served from draught containers over 40 litres which will help pubs and bars
• There will be a new small producer relief for cidermakers and other producers of lower ABV drinks (below 8.5%).

Universal Credit

The Government is reducing the taper rate (whereby the amount you receive in benefits goes down if you’re earning more through your job) in Universal Credit (UC) from 63% to 55% Workers, as well as increasing work allowances in UC by £500 a year. This, the Tourism Alliance believes, will make it more financially attractive for people on Universal Credit to find work and should help with staff shortages in hospitality and tourism businesses.

4G

Government is to provide £180 million over the next three years as part of the government’s £500 million investment for the Shared Rural Network, to deliver high-quality 4G mobile coverage to 95% of the UK.

Apprenticeships

There is to be an increase in apprenticeships funding, which will rise to £2.7 billion by 2024-25 -this will include meeting 95% of the apprenticeship training cost for smaller employers who do not pay the Apprenticeship Levy.

Fuel Duty and HGV VED

Fuel Duty has been frozen.  Vehicle Excise Duty (VED) has been frozen for HGVs.

Transport Infrastructure

In brief:

• £24 billion will be allocated to strategic road improvements between 2020-21 and 2024-25 for routes such as the A66 Trans-Pennine, plus
• £35 billion for rail over the SR21 period including High Speed Two
• £500 million to restore transport services lost in the Beeching cuts

Comprehensive Spending Review announcements

Whitehall departments will receive a rise in overall spending, totalling £150bn over the course of this Parliament. Total departmental spending will grow in real terms at 3.8% a year over this Parliament – the budget for DCMS (Department for Digital, Culture, Media and Sport) will increase from £2.2bn this financial year, to £2.8bn in 2022/23 and then fall back to £2.7bn for the next three years – an increase of 5.8% per annum in nominal terms.

DCMS Settlement

The following DCMS CSR funding announcements have been made, including:

• Funding the £800 million Live Events Reinsurance Scheme and an extension to the £500 million Film & TV Production Restart Scheme
• £480 million in 2022-23 for a year of celebration across the UK in 2022 when communities and nations will celebrate the Commonwealth Games, Unboxed: Creativity in the UK and the Queen’s Platinum Jubilee
• Funding for the UK and Ireland’s bid to host the 2030 men’s Football World Cup, and the UK’s bids to host both the 2025 women’s Rugby World Cup and the 2026 Tour de France Grand Depart.