Kevin Sefton, CEO of untied provides an analysis of chancellor Rishi Sunak’s 2021 Autumn Budget and Spending Review:
Help to Grow scheme
Individual entrepreneurs have been overlooked by this scheme.
“The government’s Help to Grow scheme announced earlier in the year badly needs to be extended. It pledges management courses and a grant of up to £5,000 to help small businesses invest in digitalization (which includes free tech advice and software discounts) – however it doesn’t help the smallest of businesses as only limited companies with five or more employees and which have been trading for at least 12 months are eligible. The heaviest admin burden falls on the smallest businesses, and we would like to see the initiative extended to all businesses.”
Dearth of training opportunities for people IN the workforce
“Whilst we welcome the overall increase in total spending on skills and post-16 education, there still seems to be a dearth of training opportunities for those people that are already in the workforce. It’s important for the nation as a whole to encourage lifelong learning and foster training across businesses otherwise this pot of money will be too limited for most companies. We hope to see elements of this in further government announcements.”
Basis period reforms
Accountants and advisers have warned that this would create a deadline squeeze
“Outside the Chancellor’s speech, it has been announced that from 2024/25 self-employment businesses will be taxed on the profits they make in the tax year rather than for the accounting year ended in that tax year. This will tie into the adoption and mandation of Making Tax Digital for Income Tax from April 2024
“While a simplification, many accountants and advisers have warned that this would create a deadline squeeze. Potentially 16 million additional tax filings will be due in those 12 months compared to the previous year. The move to a new basis period can have an impact on businesses through bringing profits into charge earlier than expected and we call for measures to support those businesses that will find their cashflow significantly worse off as a result.
HMRC needs to embrace the commitment in its ten year strategy to support the integration of tax into other services through the use of APIs
“We also welcome the announcement of a further £136 million investment for HMRC to help deliver the Single Customer Record and Account. We hope this investment will help speed up delivery of a simpler, single platform for taxpayers to bring together and replace current complex and confusing systems.
“Tax does not exist outside other aspects of people’s financial lives. We call on HMRC to ensure that through all the system changes, that it embraces the commitment in its ten year strategy to support the integration of tax into other services through the use of APIs. This will allow the development of new, innovative and better taxpayer-centred services, making it easier to manage and pay their taxes and to communicate securely with HMRC.”
Research and development
These reforms will help to support growth in UK's innovative businesses and reinforce the UK’s status as a science superpower
"As we anticipated in our autumn budget predictions last week, we saw significant and welcome enhancements to Research and Development (R&D) tax reliefs, and the government reaffirmed its commitment to increasing investment in UK R&D to 2.4% of GDP by 2027.
"We welcome the announcement of the reforms to R&D tax credits, and the inclusion of data and cloud computing costs as qualifying R&D expenditure. This will help to support growth in UK's innovative businesses and reinforce the UK’s status as a science superpower.
“We note that there is now a significant market in advisers offering R&D tax credit support, and receiving a commission of the tax credit that is generated. There is a wide variation in what businesses are claiming and we hope that there will be greater clarity and certainty to businesses. We see significant risk for those businesses that are being encouraged to overclaim.”
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