Budget 2021 Highlights for Small Business Owners

Kirsty Young Business Tips, Limited Company, News, Tax

Another year, another Budget! This year’s second budget was a little quiet on the tax front.

While there were plenty of announcements around financial matters, in this blog we’ve covered only the main highlights for small business owners.


For those businesses looking for COVID loan scheme help

The Chancellor announced a 6-month extension to the Recovery Loan Scheme.

This loan scheme is available to businesses trading in the UK and affected by the pandemic. Businesses need to demonstrate that they are viable were it not for the pandemic.

Loans from The Recovery Loan Scheme carry the added benefit of your business directors not needing to providing a personal guarantee.


For businesses looking to invest in equipment

Many businesses will now be using the ‘Super Deduction’ for new investments. Where this isn’t applicable, ‘Annual Investment Allowance’ was the relief most commonly used.

This allowance was due to have the maximum spend possible reduced from £1 million to £200,000 next year. Now that drop has been delayed until 1st April 2023.


For those businesses with premises in England

The Chancellor Rishi Sunak announced good news for small businesses with premises in England.

  • The business rates multiplier (one of the two figures that determine the rates you pay) will not alter until at least 31st March 2023.
  • An extra 50% business rates relief will be available for retail, hospitality and leisure properties until at least 31st March 2023. This is capped at 110,000 per business.
  • Business rates revaluation will take place every three years instead of five. This will mean (in theory) your ‘rateable value’ (the other value that determines what rates you pay) is more accurate.

There are also some temporary reliefs available if you improve a property and it would cause an increase in ‘rateable value’.


For employers

From April 2022, the National Living Wage (aged 23 and over) will increase to £9.50 an hour.

If you have employees with Van benefit (access to company van, usually taxable via a ‘P11d’) this will go up slightly with inflation.


For those businesses claiming R&D tax relief

HMRC are looking to accept data and cloud computing costs in your Research and Development tax relief claim. Further details are needed on this, but this was the headline announcement. The changes will not take place until April 2023.

Tax relief under the scheme is believed to being restricted to UK-based activity only. Again, further details are needed, but it’s expected on the surface level information that claims will only be possible on expenditure on UK R&D activity.


For those owners selling property

If you’re selling residential property, you might need to pay tax on the profits. From April 2020 you had to report this on an extra tax return within 30 days of completion.

This is a practical nightmare. Luckily, HM Revenue & Customs have listened to feedback and added extra time for reporting these gains.

For property selling on or after 27th October 2021, you will now have 60 days report and pay the tax.


A reminder on previous announcements

Whilst the budget was oddly quiet on tax news, it’s worth reminding you that recently we’ve had rises announced to:

  1. Dividend Tax (+1.25%)
  2. National Insurance (+1.25%)
  3. Corporation Tax (up to 25%)


Not sure how these changes apply to your business?

Ask your accountant or book a consultation with. We offer a paid 1 hour, 1-2-1 consultation so you can ask simple questions of an accountant. You don’t need to be a Heelan Associates client, or even become one, so it’s a great way for you to get the information you need.