It’s that time of year again, the financial services equivalent of Christmas Eve, when the Chancellor announces our financial fate for the foreseeable. So, what did we learn this time around?
Well in good news, most things affecting financial advice seem to have been spared… for now! As usual it was largely about spending, with little change on personal tax – and unsurprisingly absent again was any mention of inheritance tax, capital gains tax or pension tax relief – all the juicy stuff we were waiting for!
The big question for us was around what the impact an increase in inflation will have, which is currently 3.1%, and set to rise to 4% next year. Not unexpected, although higher than most people may have thought, the Chancellor explained the increase will happen due to supply chain issues and energy prices that “will take months to ease”. We’re staying tuned to see what will happen here.
When it comes to business, Rishi stated that “innovation comes from the imagination of business” – and to support this, there were a few key announcements that will hopefully benefit some of us moving forward:
- Plans to reform R&D tax reliefs to support modern research methods.
- An extension of the temporary £1 million level of the Annual Investment Allowance to March 2023, providing more upfront support to help businesses across the UK to invest and grow.
- Supporting private R&D investment by increasing funding for core Innovate UK programmes, reaching circa £1 billion per year by 2024-25, over £300 million more per annum than in 2021-22.
- Plans to reduce the burden of business rates and support investment in England, the government is freezing the business rates multiplier for a further year, a tax cut worth £4.6 billion over five years.
- New investment incentives in England totalling almost £750 million, including tax relief for eligible green investments and a new ‘business rates improvement relief’.
- Over £2.6 billion for the UK Shared Prosperity Fund over the Spending Review, focused on helping people into jobs and get on in life across the UK.
That, paired with a five-point plan to improve centuries-old taxation on Britain’s alcohol consumption (you probably know we’re partial to a glass of two of fizz!) were our main takeaways, but you’ll be sure we’ll be spending our evenings (with said fizz) digesting the rest of the budget and sharing more of our thoughts with you very soon.