Rishi Sunak, the Chancellor of the Exchequer, has delivered a bullish Autumn Budget and Spending Review 2021 to Parliament. The Statement includes a number of measures that will impact the construction and merchanting sectors directly. Here is a list of some of those measures.

Adressing a pack House of Commons, the Chancellor painted a highly positive picture of the economic situation of the UK, claiming employement figures lower than expected, and higher economic growth than forecast, as signs of his party's careful stweardship of the country.

Both the Shadow Chancellor, Rachel Reeves, and the leader of the SNP group in Westminster, Ian Blackford, who presented official responses to the statement, portrayed a very different, much bleaker situation, which, they thought, the Chancellor's measures will fail to address. 

With regards to the construction and merchanting industries, few measures were in fact announced that will impact in the sector directly. Only a week away from the opening of COP26, there was, in particular, a conspicuous absence of environmental measures. What was announced revolved mostly around corporate taxation.

Vehicle Excise Duty (VED) rates for cars and vans will be updated in line with the Retail Price Index (RPI) from 1 April 2022, while VED and Levy rates for heavy goods vehicles (HGVs) will remain frozen for 2022-23. The HGV Levy will be suspended for another 12 months from August 2022.

From 6 April 2022, the van benefit charge and the car and van fuel benefit charges will increase in line with CPI. As announced at Budget 2020, the government confirms that the Company Car Tax rates already announced for 2022-23 will remain frozen until 2024-25. Fuel duty will be frozen in the UK in 2022-23 for the twelfth consecutive year.

The government will increase the National Living Wage for individuals aged 23 and over by 6.6% from £8.91 to £9.50 per hour, effective from 1 April 2022.

Following the consultation launched at Spring Budget 2021, R&D tax reliefs will be reformed to support modern research methods by expanding qualifying expenditure to include data and cloud costs.

The government will extend the temporary £1 million level of the Annual Investment Allowance to 31 March 2023, in order to encourage businesses to bring forward investment, and making tax simpler for any business investing between £200,000 and £1 million. 

Regarding business rates, the frequency of revaluations will take place every 3 years, instead of every 5 years, starting in 2023, although the transitional relief for small and medium-sized businesses, and the supporting small business scheme, is to be extended for a year. This will restrict bill increases to 15% for small properties (up to
a rateable value of £20,000 or £28,000 in Greater London) and 25% for medium properties (up to a rateable value of £100,000), subject to subsidy control limits. The business rates multiplier will be frozen for a second year, from 1 April 2022 until 31 March 2023, keeping the multipliers at 49.9p and 51.2p. 

A new temporary 50% business rates relief is to be introduced for eligible retail properties for 2022-23 - up to a £110,000 per business cap. Similarly The Chancellor is introducing a 12 months 100% improvement relief from higher bills for occupiers where eligible improvements to an existing property increase the rateable value. This will take effect in 2023 and be reviewed in 2028. 

Between 1 April 2023 and 31 March 2035, targeted business rate exemptions will apply for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible heat networks, to support the decarbonisation of non-domestic buildings.

The government will continue to explore the arguments for and against a UK-wide Online Sales Tax. If introduced, the revenue from an OST would be used to reduce business rates for retailers in England.

The Recovery Loan Scheme will also be extended until 30 June 2022 to ensure that lenders continue to have the confidence to lend to small and medium-sized businesses. Finance will be available up to a maximum of £2 million per business, supporting their recovery and growth following the pandemic. 

The government will freeze the Aggregates Levy rate for 2022-23, but intends to return to index-linking in future. 

Reacting to the statement, the Builders Merchants Federation (BMF) expressed its disappointment that it did not include financial support to kick start the upgrade and decarbonisation of the UK’s housing stock. However, the BMF welcomed today’s announcement of more investment in further education, which will help promote a low-carbon skills revolution.

BMF CEO John Newcomb said: “With the UNCOP26 Climate Conference less than a week away, we believe a National Retrofit Strategy is the best way to tackle an urgent national infrastructure priority - namely to improve the energy and thermal performance of homes - especially with rising gas prices adding to pressure on household bills.

“The BMF and others involved in property RMI put together the Construction Leadership Council’s 20-year fully-costed plan to improve existing homes; an investment of £5.3 billion over the next 4 years to tackle emissions.

“Today’s news means international visitors arriving in Glasgow will see a missed opportunity to decarbonise by doing something simple - upgrading homes properly”.