Focus on driving economic growth
The chancellor expects the economy to reach pre-Covid levels by 2022. Rather than introducing tax increases, the Budget focused on increasing spend in areas that will drive economic growth.
Planned rise on fuel duty cancelled
With prices at the pumps the highest they’ve been in eight years, the planned fuel duty hike was scrapped.
Business rates to be reformed
Rent re-evaluation will now take place more frequently – every three years from 2023.
Some of the businesses most affected by the Covid-19 pandemic – the retail, hospitality and leisure sector – will benefit from a 50% business rates discount up to a maximum of £110,000 in 2022-23. This discount applies to businesses in England, with the devolved nations responsible for setting their own rates.
The Annual Investment Allowance (AIA) will remain at the much higher level of £1 million until March 2023. This will reassure businesses who have been planning to make investments but have been hampered by product and material shortages. Businesses which make use of AIA to purchase new equipment may need to review their policies to ensure they have sufficient cover.
The National Living Wage to increase by 6.6%, to £9.50 an hour from 1 April 2022. While this is welcome news for workers, there are concerns that small businesses in particular will struggle with the rise in costs, particularly alongside rising energy prices.
Recovery Loan Scheme extended
The Recovery Loan Scheme has been extended by six months until June 2022. Government-backed loans of up to £10 million per business are available to be used for any legitimate business purpose.
See more about Recovery Loans and full eligibility criteria https://www.gov.uk/guidance/recovery-loan-scheme
IPT left untouched
The rate of Insurance Premium Tax (IPT) was left untouched – a move which was welcomed by the British Insurance Brokers’ Association (BIBA), who said it would provide reassurance to customers who are already facing price increases due to a range of external factors.
The government reaffirmed that investment in the Flood and Coastal Erosion Risk Management (FCERM) programme will double, with the aim of protecting 336,000 properties across England. There will also be an additional £27 million to support flooding incident and emergency response activities and an extra £22 million each year for the maintenance of flood defences.
At NIG, we are here to support you and your clients as the UK works towards recovery.
Please continue to talk to your usual NIG contact about your clients’ changing insurance needs.