On Wednesday 27th October 2021, Chancellor Rishi Sunak delivered his Autumn Budget in the House of Commons, detailing the government’s tax and spending plans for the year ahead.
TBOS shares our feedback on the Budget 2021…
PERSONAL TAXATION AND WAGES
- The National Living Wage will increase to £9.50 from April 2022.
- 25% hike in National Insurance Contributions from April 2022 to provide a new ring-fenced health and social care levy.
- 25% hike in Dividend Tax rates from April 2022.
The increase of 1.25% on National Insurance Contributions will hit businesses and workers with increased costs and a reduction in take home pay. Company shareholders will also need to plan their 2021-22 dividend distribution to see if there are some potential savings on taking a larger dividend instead of carrying over into the following year.
PROTECT JOBS AND LIVELIHOODS
- Skills and training for young people will increase by £3.8bn over the parliament to fund the new vocational T levels and create 24,000 new apprenticeships.
- The launch of the “Multiply” scheme which will help 500,000 adults across the UK improve their numeracy skills.
- £300m towards “A Start for Life” parenting program with an extra £170m by 2024-25 going into paying for childcare.
With the new investment in technology-based qualifications and apprenticeships this should help provide additional quality candidates to the job market. Also, with the numeracy help for adults and the additional support for working parents this will also allow workers to be able to fill the large number of current vacancies
- The public sector pay freeze will end in March 2022 with 5m public sector workers in the health, education and defence sectors seeing their wages rise next year.
- £2.6bn announced to help create 30,000 special needs school places.
- Additional £4.7bn available by 2024-25 for schools.
- £5.9bn investment into the NHS to clear appointment, tests and scan backlog.
The additional investment in the education and NHS sectors will mean that agencies making placements into these sectors will see a boost to their numbers and give further opportunity for growth over the next 3 years. Also with the increase in staff wages within the public sector will also see pay rates across the board improve.
INFRASTRUCTURE AND INVESTMENT
- Increase investment of £6.9bn to support London-style transport across the regions of England.
- £21bn investment in roads and £46bn in railways to improve journey times between cities.
- £1.8bn set aside to build 160,000 new affordable homes.
- R&D Investment will be at £20bn by 2024-25 to “secure the UK’s future as a global science superpower” but has restricted this to apply to domestic activities only.
- Changes to business rates will be reformed to support companies by including a new 12-month relief for firms to invest in their premises.
- The planned increase in business rates has been cancelled and a 50% business rate discount for companies in retail, hospitality and leisure sectors has been announced.
All of the investments announced today show a real drive towards growing businesses and improving infrastructure. Agencies providing staffing into the construction and engineering sectors should see an increase in vacancies as new projects are announced.
FUEL AND ALCOHOL DUTIES
- UK Duty Rates on alcohol will be cut from 15 to 6 in a simplified system based on the strength of the drinks – “the stronger the drink, the higher the rate”.
- Pubs and bars will benefit from a new “drought relief” cutting duty on draught beer and cider by 5% which should see the cost of a pint permanently cut by 3p.
- Introduction of a small brewers relief including for cider makers.
- No increase in spirit duty but sparkling wine and fruit ciders will see a cut in duty.
- The fuel duty increase has been frozen.
The changes to the alcohol duty will be music to a recruiters ears (especially on those Thursday nights out) with the cost of drinks being cut. The freezing of fuel duty will also be a cost saving over the year to the tune of around £1,800 per annum.
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