On the 27 October 201 Chancellor Rishi Sunak unveiled the contents of his Budget in the House of Commons, where he set out the government's tax and spending plans for the year ahead. He claimed that the economy is back on track, opening with “employment is up, investment is growing, public finances are stabilising and wages are rising”. It includes a range of announcements that impact on individuals and businesses. Here, experts from across our departments explore exactly what this means for you and your business.
Ben Stepney, Senior Associate in our Employment team comments:
“As anticipated the minimum wage will be increased from £8.91 to £9.50 an hour. Employers will have until April 2022 to prepare for this increased cost. Employers will need to review pay for not just employees currently on under £9.50 an hour, but also those in the next pay grade(s) up, to consider whether they too should be given a pay rise, to maintain a differential between the grades.”
The Chancellor also announced a major business rate cut for the hospitality, retail and leisure sectors in a bid to boost the UK’s post-pandemic recovery. Businesses in those industries will receive a 50% discount in business rates for the next year. Pubs, music venues, cinemas, restaurants, hotels, theatres and gyms will all be eligible for the tax cut.
Alisa Sweeney, Partner and Head of our Food and Drink sector team comments:
“Our clients in the hospitality industry have had a really tough time with the pandemic and it is great to see some tax measures being implemented with a view to providing them with some financial support”
The Chancellor also announced that alcohol duty is being simplified by introducing a system designed around the principle of “the stronger the drink, the higher the rate”. A “draught relief” will apply a lower rate of duty on draught beer and cider, cutting the tax by 5% on drinks served from draught containers over 40 litres and bringing the price of a pint down by 3p.
Oliver Butler, Senior Associate from our Food and Drink sector team comments:
“With various rising costs across the sector, including rises in VAT (for hospitality), and the impending end to the moratorium on rent claims, the food and beverage and retail sectors will very much welcome a reduction in business rates which, even pre-pandemic was inhibitive to many businesses.
The reduction in the duties on alcohol will only be likely to have a benefit to larger corporations rather than the smaller independents but any reduction is likely to be welcomed.”
Click here to read more about the impact on the Property industry
One of the other key points announced in the Chancellor’s budget today was that £4.8 billion would be spent on local government.
Louise Mathias-Williams, Senior Associate from our Care sector team comments:
“One would hope that this would go some way towards alleviating the extreme pressure which falls on the social care sector at this time.”
Click here to read more about the impact on Social Care