HM TREASURY: AUTUMN BUDGET AND SPENDING REVIEW 2021 PUBLISHED

Yesterday saw the Chancellor set out his budget.

A lot of information had been previewed and the full budget can be read at Autumn Budget and Spending Review 2021: A Stronger Economy for the British People (publishing.service.gov.uk).

The positive aspect is the move to multi-year budgets which enables better planning of spend over the next three years.

There is some discrepancy on the additional budget for NI Executive, according to our Finance Minister when compared to the Executive’s 2021/22 Budget there will be an additional £450m, £670m and £866m for day-to-day spending over the next three years. Some of the key points:

• One of the anticipated announcements for Tourism and Travel was the 50% reduction in APD for all domestic flights throughout the UK – to £6.50 per leg. This is a move in the right direction but hasn’t gone as far as we wanted and it is disappointing that this does not come into effect until April 2023. This will make the APD on a domestic return flight the same as travelling to Europe. In addition, the number of international distance bands are increasing from two to three, with the new distance bands set at 0-2,000 miles; 2,000-5,500 miles and 5,500 miles plus. The rates will be £13; £87 and £91 respectively for economy passengers.

• The Recovery Loan Scheme has been extended until 30 June 2022. Finance will be available up to a maximum of £2 million per business with the government guarantee reducing from 80% to 70% - Coronavirus: Apply for the Recovery Loan Scheme (nibusinessinfo.co.uk)

• The Chancellor also announced a 6.6% increase to the National Living Wage (NLW) to £9.50 an hour, starting on 1 April 2022 and a reduction in the taper rate in Universal Credit from 63% to 55%, as well as increasing work allowances in UC by £500 a year. The Chancellor specifically said that this will make it more financially attractive for people on Universal Credit to find work and should help with staff shortages in hospitality and tourism businesses.

• Alcohol will be taxed in a progressive manner, with low strength products attracting low rates of duty and high strength products attracting higher levels of duty. There will be a 5% cut to duty on draught beer and cider served from draught containers over 40 litres and a new small producer relief for cidermakers and other producers of lower ABV drinks (below 8.5%).
• Fuel duty has been frozen
• The successful bids to the Levelling Up Fund were announced which includes £49M for 11 projects in NI as below and £300K allocated to the Glens Digital Hub in Cushendall from the first round of the Community Ownership Fund