Budget 2021 Special 💷

💼 Want to know how the 2021 Autumn Budget will affect your business, but not got time to cut through all the noise? Bionic has got your back 🦾

🦾 G O

💼 Budget 2021 breakdown for busy business owners

Bionic rounds up the most relevant 2021 Budget changes so you business owners know exactly what to expect.


🤒 National Insurance Contributions

As outlined in September, National Insurance Contributions (NICs) will increase by 1.25 pence in the pound from April 2022. This means that, as an employer, you will pay NICs at a rate of 15.05% (up from 13.80%) for all employees that earn more than £8,840 per year (excluding those aged 21 or under and apprentices aged 25 or under). 

The increase will only last for the 2022/23 tax year, when contributions will drop back to their current levels and a social care tax will be introduced. This means that for the 2022/23 and 2023/24 tax year. Find out more in Issue #16.

If you’re self-employed, run your own businesses as a sole trader or in a partnership, your Class 4 NICs will go up by 1.25% (from 9% to 10.25%) on annual profits from £9,569 to £50,270. Any profits over £50,270 will pay NICs at a rate of 3.25% (a 1.25% increase on the current rates of 2.00%). 

Find out more


💷 Wages

The National Living Wage will increase from April 1, 2022. This means employees must now earn a minimum of:  

  • £9.50 per hour for employees aged 23 and over   

  • £9.18 per hour for employees aged 21-22  

  • £6.83 per hour for employees aged 18-20  

  • £4.81 per hour for employees aged under 18  

  • £4.81 per hour for apprentices 

The Chancellor also announced the pay freeze on public sector workers will be lifted from April 2022. 

There has been no reversal of the cancellation of the Universal Credit uplift, but the taper rate for in-work claimants will be cut from 63% to 55%. This will take effect from December 1, 2021, at the latest. 

Find out more


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🏪 Business rates

Business rates are a tax on property used for business purposes, such as offices, shops, pubs, and warehouses. Check out the government website for more information on business rates.  The planned increase in the multiplier (used to work out business rates) will be cancelled in a tax cut for businesses worth £4.6 billion over the next five years. 

Retail, hospitality, and leisure sectors will have a year-long 50% discount on business rates. 

Find out more


📈 Corporation tax

If your business is a limited company, you’ll be hit by a hike in corporation tax from April 2023, when the rate rises from 19% to 25%. This higher rate is payable on any profits over £250,000 made from trading and from the sale of assets or investments.

If your company has profits of £50,000 or less, you’ll pay a small profits rate (SPR) of 19%. Any profits between £50,000 and £250,000 will be charged at a higher rate of 25% from April 2023, but a marginal relief will be offered to make this an incremental increase to soften the impact.

Find out more


To find out more about the Chancellor’s Budget speech, including what’s happened with VAT, fuel and alcohol duty, energy, government-backed Covid support, and the government’s plans for investment in business, click the button below 👇

Find out more


📊 B U S I N E S S

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We’ll be back with Issue #20 of The Backbone on Friday, November 5 🎆