Autumn Budget 2021 – Key points for SMEs

The Chancellor's 2021 Autumn Budget was delivered against a backdrop of post-pandemic recovery. For SMEs, the headline measures included a one-year 50% business rates discount for the retail, hospitality, and leisure sectors, capped at £110,000 per business.

The government also announced reforms to R&D tax credits to include cloud computing and data costs, and the introduction of a new 'Scale-up' visa to help fast-growing firms recruit high-skilled talent from abroad. While the Corporation Tax hike to 25% was confirmed for 2023, these immediate measures aim to provide breathing space for growth.

Business rates relief

The 50% discount for the retail, hospitality, and leisure sectors was a welcome lifeline for businesses hit hardest by the pandemic. Alongside this, the Chancellor announced more frequent business rate revaluations (every three years instead of five) and a new relief to encourage property improvements, ensuring businesses will not face higher rates bills for 12 months after making qualifying improvements to their premises.

R&D tax credit reforms

Modernising the R&D tax credit system to include data and cloud computing costs was a long-overdue change, bringing the relief in line with modern research practices. However, the Chancellor also announced that the relief will be refocused towards innovation undertaken within the UK, meaning companies that offshore their R&D activities may see their claims restricted in the future.

The Scale-up visa

To support fast-growing businesses, the new Scale-up visa aims to make it easier to attract highly skilled international talent. To qualify for the route, a business must demonstrate an annualised growth in either turnover or staffing of at least 20% over a three-year period, and have a minimum of 10 employees at the start of that period. This measure recognises that access to talent is often the biggest barrier to growth for successful startups.