What is the Autumn Budget?
Now that Chancellor Rishi Sunak has announced his plans for Autumn Budget 2021, how will it affect tanning salons?
The Budget outlines how the Government plans to recover the economy post-pandemic in the months to come. Below, is a summary of some key information about this budget, and what the Autumn Budget 2021 means for salons.
It’s also important to note that Scottish Government funding is up by £4.6bn, Welsh Government funding by £2.5bn, and £1.6bn for the Northern Ireland Executive, via the Barnett formula.
Change in business rates
Rishi Sunak announced that the Government will retain business rates. However, they will undergo reforms to ease the burden on high streets: “It would be wrong to find £25bn each year in extra borrowing, cuts to public services or tax rises elsewhere, so we will retain business rates but with key reforms to ease the burden and create stronger high streets.” As a result, business rates are going to have more frequent evaluations every three years from 2023. What’s more, the Government is introducing the Green Investment Relief. This aims to encourage businesses to adopt more sustainable practices and green technologies.
A Business Rates Improvement Relief will initiate from 2023. This means businesses will be able to make improvements to their property and not pay extra business rates for 12 months.
Finally, the Government has cancelled next year’s planned increase in the multiplie. This equates to a tax cut of £4.6bn to businesses over the next five years. There will also be a 50% business rates discount for businesses in the retail, hospitality and leisure industries for one year, with a 50% discount up to a maximum of £110,000.
National Living Wage Rise
The National Living Wage for workers aged 23+ will rise from £8.91 to £9.50 per hour from 1st April 2022. The National Minimum Wage for workers under 23 and apprentices will also rise.
The chancellor stated changes in eligibility criteria for the Scale-Up Visa system. This will make it quicker and easier for businesses to bring in highly-skilled individuals from outside of the UK.
The government will invest £1.6bn for new T-levels for 16 to 19-year-olds. There is also be £550m for adult skills in England.
T-Levels are the government’s new vocational qualifications. This will be equivalent to three A-levels. T levels have been developed with businesses to meet the needs of industry.
Hair, Beauty and Aesthetics T-Levels will be introduced in 2023.
Universal Credit Taper Rate Cut
The universal credit taper tax rate is being cut by 8% from 63% to 55%, and will be introduced no later than 1 December. Sunak states this will “benefit nearly two million families who will keep, on average, an extra £1,000 a year”.
UK Economic Growth
Recovery from the pandemic could come faster than expected. The Office for Budget Responsibility (OBR) has revised its forecasts for UK economic growth, with gross domestic product (GDP) set to expand by 6.5% this year (compared to the 4% it had forecasted in the March 2021 Budget).
The Chancellor said inflationary pressures are affecting the UK economy, with the OBR forecasting that inflation will average 4% next year. He said the pressures are global in nature and are “impossible for us to address alone”. However the Government will act to support households.
On the announcement of the Budget, Victoria Brownlie, chief policy officer of The British Beauty Council, commented: “It is also welcoming to hear that from 2023, every single business will be able to make improvements to their premises without facing higher business rates bills for 12 months after they are made. Industry data indicates higher business rates deter around half of hair and beauty business owners from improving their properties. This delay will allow them to recoup the investment in improvements before seeing any increase in their business rates.
“It has been a challenging time for the personal care sector, more than 7,000 businesses have closed since the pandemic started, but these measures announced by the Chancellor today, will help our businesses recover and think towards the future.”