Autumn Budget and Spending Review 2021 - Government factsheet for business

27 October 2021

Today the Chancellor Rishi Sunak delivered the Budget and Spending Review for 2021, setting out an ambitious package of investment in innovation, infrastructure and skills, which – in partnership with business – will deliver sustainable growth and put us on the path to a high-productivity, high-skilled, high-wage economy that levels up every part of the UK.

How will the Budget and Spending Review support businesses?

• Extending the temporary £1 million Annual Investment Allowance cap for another fifteen months until the end of March 2023
• Reducing the burden of business rates by over £7 billion over the next five years including by:
  • Freezing the business rates multiplier for another year saving businesses £4.6 billion over the next five years
  ▪ A new relief for retail, hospitality and leisure businesses worth almost £1.7 billion
  ▪ Almost £750 million for businesses to improve their properties and decarbonise
• The conclusion of the business rates review will modernise the system by committing to more frequent revaluations – every three years instead of every five years
• Alcohol duty will be frozen across the board
• An extension of support for the aviation sector, through the Airport and Ground Operations Support Scheme – helping airports and ground handlers with their fixed costs
• £245 million of tax relief for theatres, orchestras, museums and galleries across the UK
• £42 million to support world-leading creative industries, providing business and skills development support for SMEs to scale up and providing bespoke support for the UK’s independent film and video game industries
• Extension of the Recovery Loan Scheme for a further six months until 30 June 2022
• Funding for the delivery of the Help to Grow Digital and Help to Grow Management schemes, helping 100,000 small and medium-sized enterprises to boost productivity
• Reforming the UK’s tonnage tax regime to ensure the shipping industry remains highly competitive in the global market
• Setting the Bank Surcharge at its new rate of 3%. The Government will also raise the annual allowance to £100 million to ensure that the tax system is supportive of growth within the UK banking market
• To ease the temporary supply chain pressures, Vehicle Excise Duty for heavy goods vehicles will continue to be frozen and the HGV Levy suspended for another 12 months from August 2022.
• Freezing fuel duty for the 12th consecutive year
• Introducing a package of APD reforms that will bolster air connectivity within the Union, through a 50% cut in domestic APD (benefiting 9 million passengers) and further align APD with environmental objectives by adding a new ultra-long-haul distance band
• Total spend on skills will increase over the Parliament by £3.8 billion by 2024-25, equivalent to a cash increase of 42% (26% real terms) compared to 2019-20
• The first increase to employer led apprenticeships funding since 2019-2020 – it will rise from £2.5bn in 2021-22 to £2.7bn in 2024-25
• Providing funding to quadruple the number of places on employer-led Skills Bootcamps and delivering 24,000 traineeships a year

How will the Budget and Spending Review help businesses to innovate?

• Increasing public investment in R&D to a record £20 billion per year by 2024-25, representing an increase of around a quarter in real terms over the SR period
• That includes £5 billion on health R&D over the SR period, including for genomics and to support the life sciences industry
• Reforming R&D tax reliefs by expanding qualifying expenditure to include data and cloud computing costs and refocusing support towards UK-based innovation, targeting abuse, and improving compliance
• Increasing support for business-driven innovation, with funding for core Innovate UK programmes to reach around £1 billion per year by 2024-25
• Delivered through the British Business Bank, the Government is also:
  o Expanding the Regional Angels Programme by £150 million
  o Expanding programmes in the North East and South West
  o New funds in Scotland (£150m), Wales (£130m), and building on existing programmes in Northern Ireland (£70m)
• £312 million to continue to fund the Start Up Loans Scheme, which will support up to 33,000 entrepreneurs by providing loans and mentoring for people starting a business
• A £1.4 billion Global Britain Investment Fund to support new investment in manufacturing industries across the UK, including offshore wind, zero emission vehicles and life sciences
• A new re-domiciliation regime making it easier for companies to relocate to the UK bringing increased investment and skilled jobs
• Introducing a Scale-up visa in spring 2022 to attract the brightest and best global talent to the UK
• Launching a Global Talent Network to bring highly skilled people to the UK in key science and technology sectors
• Maintaining the DIT Global Entrepreneur Programme to bring more entrepreneurs to the UK each year