What are the business implications of the UK’s Autumn Statement?
Leeann Nash November 17th 2022 - 2 minute read
After several delays the UK government finally unveiled its Autumn Statement, on 17 November.
Covering a range of policies, from tax hikes to public spending cuts, the Autumn Statement was designed to ‘balance the books’ as the UK enters a recession, which may last for over a year.
Specifically for businesses, there was a packed of around £13.6bn in assistance. For instance, the business rates multiplier has been frozen for another year, to support firms through what is likely to be a tough trading period.
Retail, hospitality, and leisure businesses have also been promised up to £2.1bn in terms of rate relief. Transitional Relief is due to be reformed so that businesses can enjoy lower bills as a result, which will be done by abolishing downwards caps.
Small businesses who lose eligibility for rate reliefs due to property valuations has also been promised.
Because of these measures, the total increase in business rate bills will be less than 1%, as opposed to a potential 20% without these budgetary measures.
Though, the measures do not account for every business, with larger retailers and other sectors seeing little support. Similarly, the relief is capped at £110,000 per business.
The statement also scrapped proposed plans for online sales due to ‘complexity’, offering further relief for online focused retailers as the Government aims to assist ‘bricks and clicks’ businesses.
However, the tax burden for businesses has now increased, with corporation tax going up to 25%. While necessary to contribute to plug the ‘fiscal black hole’, this may add an extra pressure to businesses. Similarly, windfall taxes on energy suppliers were outlined.
The National Living Wage has increased as well, with the minimum wage for over-23s set to rise 9.7% to £10.42 an hour from April. Likely raising employment costs for many businesses.
Energy bills have now been capped at £3000 per year, as opposed to £2500. This may lead to larger energy bills for your business, especially in conjunction with the windfall tax on energy producers.
Some elements of the Autumn Statement, such as the relief on rate measures may serve to cushion the impact the recession may have on businesses over the course of the year, and the increase in wages for employees may also be a benefit.