Autumn Budget 2021
Autumn Business Update for UK small business owners
Small business owners hopes for some crumbs of comfort from the chancellor in his budget and autumn statement were dashed. The triple hit on small businesses coming from April 2022 is still very much happening.
What was in the Autumn Budget?
Hit 1: Corporation tax from April 1 2023 to increase to 25% for companies with profits over £250,000. Companies with profits under £50,000 will be taxed at 19%. Companies with profits between £50,000 and £250,000 will be taxed between 19% and 25%.
Hit 2: The dividend tax rate for basic rate taxpayers will increase from 7.5% to 8.75% from April 2022. Higher rate and additional rate taxpayers will see their dividend tax rates increase by 1.25 percentage points.
Hit 3: In April 2022 all 3 rates of National Insurance Contributions (NIC) will increase by 1.25%. Then in April 2023, the 3 rates of NIC will reduce back down to their current levels and the new Health and Social Care Levy will come into place.
As was leaked this week, small business owners have another hit to their finances….
Hit 4: The National Living Wage is increasing from £8.91 to £9.50 an hour from April 2022
What does this mean for your business? It means that your wage costs – both salary and National Insurance contributions – have increased significantly. We can help you understand what this means for your profits and how income you can safely take out from your business.
So what else was announced in the budget which is relevant for small business owners? Click on our presentation below for more information
You can find out more on the gov.uk website.
If you have any questions about the budget, just get in touch1