Rishi Sunak, the Chancellor of the Exchequer, recently delivered his Autumn Budget and Spending Review in the House of Commons.
You might have heard some of the headlines – reductions in alcohol duty, a softening of the universal credit cut, and tax cuts for ships that fly the red ensign.
At Green & Peter, we’re specialist accountants for creative and property sectors, and so were especially keen to hear what Rishi Sunak had to say about these industries.
Here’s our summary of what the Autumn Budget and Spending review means for the creative and property sectors.
Autumn Budget 2021: creative industries
During the pandemic, the creative industries have struggled due to social distancing and temporary closures. To help, Sunak announced a range of measures for the industry, altogether worth £42 million.
This includes an annual £14m of support for creative industries, including the film and game industries.
Part of this will fund an extension to the film & TV production restart scheme to help productions plan with certainty. Businesses can register for the scheme until 30 April 2022 and claims on losses can be made until 30 September 2022.
In his speech, the Chancellor also said he would make “creative tax reliefs more generous”.
To do that, he announced the Government would extend the tax relief for museums and galleries, which is due to end in March 2022, to March 2024.
Theatres, orchestras, museums and galleries will also see their tax relief doubled until April 2023. They won’t return to the normal rate until April 2024, Sunak said.
Business rates
The Chancellor also announced a range of reforms to the tax on business property, otherwise known as business rates.
First, Sunak revealed the business rates multiplier would be frozen for 2022/23, cumulatively saving businesses in England £4.6 billion over the next five years, according to figures from the Treasury.
He also announced business revaluations will occur every three years, rather than every five, so the rates businesses pay are fairer and easier to work out.
What’s more, businesses that make eligible improvements to increase the value of their business property will be able to claim a 100% improvement relief for business rates for 12 months.
The Government is yet to work out exactly how this will work, however, although it will take place from 2023 and be reviewed in 2028.
Finally, eligible hospitality, leisure and retail businesses will only have to pay 50% of their business rates in 2022/23, up to a cap of £110,000.
Businesses in these sectors were due to start paying 100% of their business rates bills again from 1 April 2022, and so this continued reduction in rates will be welcome to business owners.
Residential property developer tax
The major tax change relating to property in the Autumn Budget was the residential property developer tax (RPDT).
Applied at 4% on profits of companies involved in residential property development from 2022/23, the RPDT will only kick in when companies make over £25 million.
Otherwise known as the ‘cladding tax’, the revenue collected from the RPDT will contribute to the £5 billion fund required to remove unsafe cladding from buildings at risk of fires.
Between the 2022/23 and 2026/27 tax years, the Treasury expects the RPDT to collect £1.125bn – the tax is only supplementing cladding removal, not covering the full cost.
Talk to us about other changes in the Autumn Budget 2021.
