On October 27, Chancellor Rishi Sunak presented his budget to the Parliament. The new UK budget contains proposition to overhaul business rates, cut the rate for the pandemic-hit retail and hospitality sector, halt a planned annual increase and incentivise environmental-friendly property investments.
Chancellor said he would not abolish a tax that raises £25 bn/year, but he will provide measures to ease the burden on businesses such as shops, pubs, restaurants, cinemas, gyms and leisure centres.
Under the new system, property valuations will fall under review every three years, while earlier, it was every five. Also, an annual increase in business rates will be postponed for a second year, and there would be a one-off 50% discount for one year for businesses in retail, hospitality and leisure.
Investors in green technologies, such as solar panels and heat pumps, will benefit from new tax relief.
“Apart from the COVID reliefs, this is the biggest single-year cut to business rates in thirty years,” Sunak told the Parliament. “Taken together, today’s budget cuts business rates by seven billion pounds.”
Rishi Sunak announced that there would be a reduction in the surcharge on bank profits. The corresponding tax will drop from 8% to 3%. However, combined with other tax rises, this measure means banks’ overall corporation tax will increase from 27% to 28%. In addition, the £1m annual investment allowance will be extended to March 2023 instead of ending in December.
Britain wants to attract international companies
The Chancellor announced £1.4bn in grants in its new ‘Global Britain Investment Fund’ as an attractive measure for international companies to invest in Britain.
The fund includes £817m for the electrification of UK vehicles and their supply chain, £354m to support investment in life sciences manufacturing, and up to £230 million for the offshore wind sector.
The British Business Bank’s regional funds will provide debt and equity finance to small and medium enterprises. £150m additional spending allocated for the Regional Angels programme, which aims to reduce imbalances in access to early-stage equity finance in the UK. Altogether the investment push from the budget accounts for more than £1.6bn.
The Chancellor also announced a consultation to make it easier for companies to relocate to the UK. The government hopes to create a system similar to Canada, New Zealand and Switzerland and to attract talent to the UK.
Oracle Capital Group will continue to monitor the situation. Our specialists provide real estate, share and asset purchase transactions support, improve shareholder participation, and provide general corporate support to your UK business. Oracle Capital Group helps its clients with impartial advice on access to emergency grants and loans.
