On the 27th of October, Rishi Sunak delivered the Autumn Budget; an announcement that, given the state of the UK economy following the pandemic, was a frightening prospect.
There were both positive and negative prospects from the speech – the prediction that the UK economy is set to return to ‘pre-Covid’ levels by 2022 was encouraging to hear. However, many statements have set the public in a state of worry, anger and uncertainty, including the very real likelihood that inflation is going to continue rising.
So how has the budget affected employers?
Rise in minimum wage
As part of the budget announcement, the government declared that the minimum wage is to increase next April, with those between the age of 21 and 22 seeing the highest rise. This has come as encouraging news to those working within the public sector and younger people who are struggling to move into better areas of work.
However, the increase will undoubtedly also affect employers, as many public sectors and small businesses will struggle to keep up with the increase. Increasing the wages of employees may also affect the cost to consumers and in some cases, will force a difficult decision on whether to make workers redundant again.
Levy on removal of dangerous cladding
Many will remember the tragic events that led to the Grenfell Tower being destroyed by a fire in 2017, with over 70 people losing their lives. An in-depth inquiry found that the cause of the spread was the polyethylene material in the cladding that surrounded the building (https://www.bbc.co.uk/news/uk-40301289).
The government announced that construction companies will now be charged a levy to create a £5 billion fund to safely remove any dangerous cladding on buildings. This levy will affect companies with a profit of over £25 million at a rate of 4%. Many construction firms and developers will face this levy, on top of the numerous issues they have faced during the pandemic.
Help to Grow Scheme
In March, the government proclaimed it would invest in the productivity of SME’s by providing access to helpful training tools. The Help to Grow scheme, which aims to help up to 130,000 businesses now has a management and digital course available for companies to utilise (you can access more information here https://helptogrow.campaign.gov.uk/.
From December, if you are eligible, you may also be awarded a discount of up to 50% on software to improve your business, worth up to £5,000.
Discount on business rates for certain sectors
Perhaps one of the hardest hit sectors during the pandemic was the hospitality and retail sector. So, thousands of companies felt optimistic when the Chancellor declared that these sectors will be given a 50% discount on business rates for a year.
This discount includes cinemas, pubs and restaurants, music venues, hotels and fitness centres and will be capped at £110,000.
Rishi Sunak summarised that the move would “ease the burden of business rates and boost our high streets”.
With all of these changes affecting businesses, this can be a challenging time to understand and make progress.
SFB Consulting has a team of experts on hand to assist with any queries and issues that you might have following the changes to the budget. Call us directly or email us on email@example.com to get in touch.