4 months ago
Jeremy Hunt recently announced the Conservative Government's plan for a stronger UK economy. While there was a clear focus on individuals, many of his announcements will affect businesses of all sizes. In this article, we explore what the 2022 Autumn Statement means for small businesses.
It's no surprise that the UK is entering a recession. With the recent economic performance downturn, it was inevitable, but during the autumn statement, the Office for Budget Responsibility (OBR) made it official. The UK is in a recession, making it vital for businesses to take action.
One of the main focuses of the Autumn Budget is to address increasing inflation, which is having a detrimental effect on growth and devaluing the profits of businesses. Although Jeremy Hunt placed a lot of blame on global headwinds, the Conservative Government plan to tackle inflation aims to reduce inflation. This will subsequently help businesses with ever-increasing rates and operating costs if it comes to fruition.
Alongside the 45% income tax threshold shifting from £150,000 to £125,140, some measures addressing taxes will directly affect businesses.
The main rate of Corporation Tax will increase from 19% to 25% from April 2023
R&D Tax Relief Scheme for SMEs will decrease from 130% to 86% from April 2023
Electric vehicles will become eligible for road tax from 2025
Capital Gains Tax Annual Exempt Amount to be cut from £12,300 to £6,000
Tax-free dividend allowance on income from shares will be cut from £2,000 to £1,000 from 2023, and then to £500 from April 2024
Multi-national company tax evasion will be addressed
Under the Autumn Statement, Jeremy Hunt announced that the Conservative Government will cut the Annual Exempt Amount for Capital Gains Tax from £12,300 to £6,000 as of 2023. They'll then cut it to £3,000 as of April 2024.
Tax increases will place additional strain on businesses. If your business is facing difficulties paying taxes, we can help you to avoid potential penalties by comparing some of the best rates available on business tax loans.
The issue of business energy was also at the forefront of the 2022 Autumn Statement. Although the announcement focussed on household energy bill relief, business energy use was addressed. While no concrete details were announced, there are plans for some form of business energy relief after the Energy Bill Relief Scheme concludes in March 2023.
As part of the Autumn Budget, Jeremy Hunt announced that the UK Government is launching a £13.6 billion scheme to support businesses in paying their rates.
The scheme is intended to benefit around 700,000 businesses and help in this time of financial difficulty. You can find out how this will help you in the HM Treasury Business Rates Factsheet, but the overview of what's on offer is as follows:
The business rates multiplier will be frozen for another year
Retail, hospitality and leisure businesses will receive relief worth almost £2.1 billion
Transitional Relief reforms designed to help businesses reduce bills by abolishing downward transitional reliefs caps
A £1.6 billion scheme to cap bill increases for businesses subject to higher bills due to revaluation.
Protection for small businesses who lose eligibility for either Small Business or Rural Rate Relief due to new property valuations
Jeremy Hunt mentioned several times that the Conservative Government wants to make Britain the new Silicon Valley. Subsequently, they aim to make regulatory reforms that enable innovation that they say wouldn't have been possible as part of the EU. It's unclear at this time what these reforms will be, but they will likely allow those operating within the tech industry to be more profitable. We'll know more about these reforms by the end of 2023.
Unemployment was a hot topic of the Autumn Budget, with unemployment levels at a worrying high. The UK Government is taking steps to address unemployment and benefits, but one of the steps it's taking to help individuals is the introduction of Work Coaches. Work Coaches will help individuals improve their career prospects. For businesses, this will hopefully mean an improvement in the availability of skilled workers.
The national living wage will rise by 92p an hour, going up to £10.42 an hour. While this may place additional strain on small businesses, this increase will ease pressure on households struggling with the cost of living and help with spending.
Finally, Jeremy Hunt advised that the UK Government will advise on the retirement age in 2023. While there isn't any news on what this announcement will be, it will likely affect businesses employing those approaching retirement age.
At BusinessComparison, we specialise in helping businesses to save time and money. We compare a range of products, from business energy to loans and other finance products, and business connectivity. We allow you to find the best deals without wasting lots of time. Compare to save time and money with us today.