Shenward’s experts tuned in to listen to the budget announcement on October 27th – though a lot of what was announced had previously been shared with the media ahead of the Chancellor’s budget.

Thing is, with so much information offloaded via various channels, it’s easy to get caught up in a slurry of information overload. Between the different news outlets and channels, the actual information you’re looking for can become difficult to find.

In true Shenward style, our team has developed a round-up of the budget announcement, giving you insight into what changes have been made and what we can expect going forward.

Income Tax

Though the income tax rates have been announced to be unchanged, there are still some changes that will take place that are worth noting. Some of these were announced before the Budget, but in the interest of context and a full picture, we feel it’s best to inform you of all upcoming changes.

  • The personal allowance is set to increase to £12,570 in April 2022, alongside the basic rate threshold which will increase to £50,270. After which, both will be frozen to 2026.
  • The dividend allowance remains unchanged, however, it’s worth reminding that the dividend rates are set to increase by 1.25% from April 2022 – this is in line with the announcement of the Health and Social Care Levy previously announced.

A significant change announced in the Budget is the basis period reform, which changes the way trading income is allocated to the tax year.

Generally, businesses draw up annual accounts to the same date each year, which is known as their ‘accounting date’. Currently, a business’s profit or loss for a tax year is usually the same for the year up to the accounting date in the tax year, known as the basis period.

The current rule creates overlapping basis periods, which charges tax on profits twice, generating a corresponding ‘overlap relief’ which is usually given on cessation of the business.

The reform will change this to a ‘tax year basis’ from the tax year 2024 to 2025. This means that a business’s profit or loss for a tax year is the profit or loss arising in the tax year itself – regardless of the accounting date. This removes the basis period rules, preventing the creation of further overlap relief.

So, what will the transition involve?

On transition to the tax year basis in the tax year 2023 to 24, all businesses basis periods will be aligned to the tax year, with outstanding overlap relief given. Businesses with an accounting date other than the end of the tax year would need to apportion profits or losses from different accounting periods to fit in with the tax year.

This sounds complicated but may mean using provisional figures in tax returns if the accounts and tax computations for the later accounting period are not prepared before the 31st of January filing deadline. If this is the case, amendments will be required to tax returns once final figures are available.

Don’t let this information overwhelm you. At Shenward, we are on hand to ensure the new requirements are adopted seamlessly. The basis of this reform is to help simplify Make Tax Digital for Income tax, which will occur from 2024.

National Insurance

No changes were announced in the budget for National Insurance, but this is a good time to remind you that National Insurance rates are increasing by 1.25% for Class 1 Primary and Secondary as well as Class 4 from April 2022.

National Minimum Wage

The National Minimum is set to increase as of April 2022. See the table below for the current and new rates of pay determined by age group.

AgeCurrentApril 2022
23 +£8.91 £9.50
21 – 22£8.36 £9.18
18 – 20£6.56 £6.83
Under 18£4.62 £4.81
Apprentice Rate£4.30 £4.81

Capital Gains

Whilst there was no change to the Capital Gains annual exemption, a few other changes were announced.

The chancellor announced the extension to the Capital Gains Tax returns and payment on property disposal deadline from 30 days after completion up to 60 days.

Furthermore, there was clarification on mixed-use properties. The 60-day deadline for mixed-use properties applies, apportioned to residential proportion only.  

Capital Allowances

A super-deduction has already been announced, allowing companies investing in new plant and machinery assets to claim a 130% super-deduction capital allowance on plant and machinery investments. Furthermore, the super-deduction will allow companies to cut their tax bill by 25p for every £1 they invest.

The Annual Investment Allowance (AIA) increase to £1 million was due to end on the 31st of December 2021, has been extended to the 31st March 2023.

Corporation Tax

In terms of corporation tax, we have already seen some recent announcements ahead of the Budget. There has been an increase in corporation tax to 25% from 19% for non-ring-fenced profits over £250,000.

In the budget announcement, a 4% levy for property developers with profits over £25 million was announced. This is to help establish a fund to finance establishments with unsafe cladding.

In addition to this, as a result of Brexit, the group relief has been abolished for UK companies claiming losses from European Economic Areas (EEA) Resident subsidiaries.


For businesses in the retail, leisure and hospitality sectors, the budget announced a 50% business rates discount from 2022 to 2023 for up to a maximum of £110,000.

For online businesses, there has been consultation on an online sales tax, amid the soaring rates of online sales consumption following the COVID-19 pandemic.

Welfare State

The Chancellor slightly reversed the taper of Universal Credit, reducing the 63% taper rate of £1 earned over the work allowance will now be 55%. This means for every £1 earned over the work allowance, the amount of Universal Credit will be reduced by 55p rather than 63p.

On the horizon, we have increased taxes looming with the increase in NI and dividends. Frozen personal allowances and thresholds will cause fiscal drag.

Our Advice…

We are aware this is a lot of information to take in. There’s no need to feel overwhelmed as it is more than likely only a few points above will affect you, but it’s best to include all information so everyone is informed of changes that may affect them.

Our advice to you is to liaise with your accountant so you can get on top of these changes as soon as possible. As always, if you need further guidance, do not hesitate to contact us at

Your accountant is one of the most important people within your business. That’s why it’s important to determine not only what you expect from your accountant prior to appointing them, but also know how you can get the most out of them once they’re part of your team.

But how exactly can you do this?

How can you get the most out of your accountant? 

Let’s explore.

Hire the right fit for you and your business.

Getting the most from your accountant relies on one thing – them having an understanding of your business and its specific needs. If an accountant doesn’t, it makes it difficult for you to work together as there will be a gap in knowledge of what you really need. 

Many accountants specialise in specific industries, but others are experts in certain sized businesses such as start-ups or larger corporations, so always ensure your appointed accountant is matched to the size of your business.

As you can understand, similar businesses are likely to face similar issues, which is why getting an accountant who understands your business is beneficial. Not only will they will be experienced in identifying and mitigating risks but they’ll also have a wealth of knowledge about the challenges you face.

Communication is Key

Ultimately without communication, your accountant cannot perform at their best. 

This works both ways. You need to have a clear channel of communication from day one to allow you to discuss what it is you are in need of and what you expect from each other. 

Obviously as your business grows your needs will change too but setting out a framework of expectations at the beginning of your relationship means no wires will be crossed, and expectations will only be met and hopefully exceeded.

Stay up to date with deadlines

Accountants make it their mission to ensure you meet deadlines and remain compliant, but even when the leg work is done for you, you’ll need to keep in mind deadlines that require your input.

Whilst it is your accountant’s responsibility to ensure you meet these deadlines, they need things from you in order to meet those deadlines for your business. 

To ensure your business remains compliant, you have to support your accountant yourself, for example by getting all paper they may need across to them well before the deadline. This way, they’ll have sufficient time to meet the deadlines for you.

Create your business plan together

This brings all of the previous points together. Your business plan is something that you should be returning to on a semi-regular basis, to touch base and look at further projections and goals. Having your accountant on board for this can be extremely beneficial for your business. It helps you get the most from your accountant because it gives them a valuable insight into your business and where it is set to go. 

Having your accountant on hand when doing your business plan is greatly beneficial to you as they’ll likely have experience with other businesses at the same life stage as you. This means they will have invaluable insight into the potential hurdles your business may face.

Multi-access cloud software

Cloud accounting software has become the norm now due to streamlined processes and the benefit of convenience. 

Allowing your accountant access to your cloud software services means they can have real-time access to your documents and paperwork, thus increasing efficiency. The greater insight they have into the financial state of the business, the better.

Make use of their network

An accountants’ network is often widely cast. From working in many industries and alongside other sectors such as lawyers and bankers, their network could be invaluable to you and your business. 

There’s no need to be coy when it comes to asking your accountant to help with connections. They are likely to have had many introductions with people across multiple industries, meaning they are able to give reliable recommendations on who may fit your needs. 

Even when it comes to general industry connections, your accountant may be able to make introductions to fellow business owners who may prove themselves to be vital connections of your own in time.

Final thoughts…

These are just a few ways in which you can ensure you are getting the most out of your accountant. 

Accountants are highly professional people and ultimately want the best for you and your business, but in order for them to deliver second to none services, they need some assistance from you to be made fully aware of your business needs.

Want to work in partnership with one of our experienced accountants? Get in touch.