29 November, 2021 in Industry News

November Update

In this client update, we highlight the views of the Autumn Budget from a number of business organisations and highlight how tax changes will affect businesses over the next year.

Business Groups Give Mixed Reviews of the Autumn Budget

The Confederation of British Industry (CBI) has responded to the Chancellor’s speech, commenting that it had shown a willingness to listen to businesses with measures that will help firms innovate and the economy grow. However, Director General of the CBI warned that the Autumn 2021 budget won’t seize the moment and transform the UK economy as many businesses remain in a high-tax, low-productivity economy with concerns about inflation.

Meanwhile, the National Chair of the Federation of Small Businesses (FSB) has voiced concerns over the Autumn Budget announcements, noting that while the budget has delivered some measures that should help to arrest the current decline in small business confidence, there is not enough within the budget to deliver the governments vision for a low-tax, high-productivity economy. The British Chamber of Commerce (BCC) has welcomed the changes to the business rates system, with the Director General of the BCC commenting that the Chancellor has listened to long-standing calls for changes to the business rates system which is good news for many firms and will provide much needed relief for businesses across the country.

For further information, click here.


IFS Expects Millions to be Worse Off in 2022 Due to Tax Hikes

The Institute for Fiscal Studies (IFS) has predicted that millions of people across the UK will be worse off next year as a result of the spiralling costs and tax rises.

The IFS have stated that changes to income tax and National Insurance, alongside rising household bills and the cost of living, will mean a slow growth in living standards.

Paul Johnson, Director of the IFS said: “Next April benefits will rise by just over 3%, but inflation could easily be at 5%. That will be a real, if temporary, hit of hundreds of pounds a year for many benefit recipients.

We are not at 1970s levels of inflation, but we are now experiencing enough inflation that real pain will be felt as low-income households – most of whom have next to nothing in the way of financial assets”.
For further information, click here.


Payment Period on Residential CGT is Doubled

Announced by Chancellor Rishi Sunak at the recent Autumn Budget, the government has doubled the period for filing and payment of Capital Gains Tax (CGT) on residential property from 30 days to 60 days.

This change was applied from 27 October 2021 and sees the deadline for residents to report and pay Capital Gains Tax after selling UK residential property increase from 30 days after the completion date to 60 days. For non-UK residents selling property in the UK, this deadline will also increase to 60 days. The Treasury has noted that these changes will help ensure that taxpayers have sufficient time to report and pay CGT, as recommended by the Office of Tax Simplification (OTS).

For further information, click here.


FSB Warn Tax Rises ‘Threaten Recovery from Pandemic’

The Federation of Small Businesses (FSB) has warned that tax rises could threaten the UK’s ongoing recovery from the Covid-19 pandemic. The FSB has highlighted that many small businesses are coming up against unprecedented strain, as the costs facing businesses are higher than ever. Many small businesses are also facing disruption due to supply chains and increasing costs according to FSB.

Following the end of the Coronavirus Job Retention Scheme, the Federation of Small Businesses has called for the government to focus on helping employer create new jobs and generate new schemes to help fill skills shortages.

Mike Cherry, National Chair of the FSB said, “It's disappointing to see that more is not being done to tackle employment costs which are a huge drain on small businesses”.

“Increasing the Employment Allowance would help protect the smallest employers who are being hit hard by the end of furlough and the NICs rise. The government should also expand Small Business Rates Relief to premises with a rateable value of £25,000, removing an additional 200,000 small firms from the scope of this tax.”

For further information, click here.

If you have any questions, please do not hesitate to contact us.

Whilst every effort has been made by CavanaghKelly to ensure the accuracy of the information here, it cannot be guaranteed and neither CavanaghKelly nor any related entity shall have liability to any person who relies on the information herein. Information given here is for guidance only. Detailed professional advice should be taken before acting on any information contained herein. If having read the guidance here, you would like to discuss further; a member of our team would be pleased to help you.