What does Rishi Sunak’s autumn budget mean for marketers?
UK chancellor of the exchequer Rishi Sunak has unveiled his 2021 autumn budget amid rising energy prices, supply shortages and inflation on course to hit 4%.
How will the autumn budget announced today affect marketers?
Positioned as the budget to forge the post-pandemic economy, key headlines included cuts to universal credit taper, alcohol duty and domestic air passenger tax.
During his speech to parliament, Sunak said he would act if inflation rose beyond the current 3.1%. The chancellor claimed he had written to the Bank of England to “reaffirm their remit to achieve low and stable inflation.”
“I understand people are concerned about global inflation, but they have a government here at home ready and willing to act,” he said.
Against the backdrop of inflation, the government forecasted UK GDP would expand by 6.5%, revised from 4% predicted in the March budget.
The autumn budget also included several polices that will directly affect the marketing and creative industries.
Hospitality relief packages
The government is to halve business rates for 12 months for companies in the retail, hospitality and leisure sectors up to a maximum of £110,000.
The chancellor claims the measures could cover up to 400,000 businesses (90%) in the hospitality and retail sector and is worth £7bn over five years.
There was a commitment to review the online sales tax, which would reduce business rates for online retailers.
Sunak has announced a raft of alcohol duty reforms, which include cutting duty on premium sparkling wines and fruit ciders and introducing a “small producer relief,” reducing duty on small brewers. Meanwhile, higher-strength alcohol is set to rise while lower-strength will be reduced.
There is also a “draught relief” targeted at pubs and bars, which will impose a 5% cut to draught beer and cider served from draught containers over 40 litres.
Training & development
The government is to funnel £1.6bn into the new T-levels, which could put an extra 110,000 16-19-year-old students through the vocational training program. Running for its second year, T-Levels include courses in digital production and design and digital business services.
An additional £500m (29% increase) for adult skills has also been made available to give more adults access to level three courses and scale up skills training programs. Within that £500m the government plans to launch an adult numeracy program designed for flexible education.
A further £170m was also funneled into apprenticeships, along with a commitment to improve the recruitment for SMEs and an extension of the £3,000 apprentice-hiring incentive.
Loans & investment
The government has extended the temporary £1m annual investment allowance until March 2023 making “tax simpler” for businesses investing between £200,000 and £1m.
The Covid recovery loan scheme has also been extended until June 2022, making up to £2m available for recovering firms, however the government guarantee has been reduced from 80% to 70%.
A ‘help to grow’ pot has been established to offer training and digital support to 100,000 SMEs, along with a startup loan program to fund up to 33,000 entrepreneurs.
Minimum wage increase
As of April 2022, the National Living Wage will rise to £9.50 per hour from £8.91 for workers aged 23 and over. There are additional plans for wage increases for those under the age of 23 and apprentices.