Businesses are facing a challenging time with soaring energy costs, disruption to supply chains, interest rate increases, wage inflation and recruitment challenges with currently 1.3 million vacancies across the UK.
The Chancellor set out in the Mais Lecture the Government’s focus to address these issues.
- Capital – cutting and reforming taxes on business investment to encourage firms to invest in productivity enhancing assets
- People – encouraging businesses to offer more high-quality employee training
- Ideas– increase in public investment in R&D and doing more through the tax system to encourage greater public investment in R&D
In the short term there is very little relief offered for businesses, although the Employment Allowance has been increased to £5,000 from April 2022 which is expected to benefit 495,000 businesses. A review of both tax policies into capital investment and R&D is expected to be announced in the Autumn Budget once consultations have taken place.
Targeted business rates relief had previously been announced which take place from April 2022 for eligible retail, hospitality and leisure businesses.
We were expecting a major overhaul of the corporation tax system to encourage capital spending to be announced today but it seems we will have to wait until the Autumn. Hopefully it will be good news for businesses and we will be in a more stable environment.
Read more about our services for businesses here. More info can be found on the HMRC website.