Chancellor Rishi Sunak unveiled the contents of his Budget in the House of Commons last week.
Declaring that he will do “whatever it takes” to help business and people through the “moment of crisis” caused by the coronavirus pandemic, Sunak laid out a three-point economic plan to fix the public finances and build the future economy.
There were few surprises in Sunak’s Budget announcements, as many had already been leaked prior to 3 March. But there are some measures which are likely to impact on your business as we go further into 2021 and beyond. I covered some in my live webinar last Friday. Here are the main business highlights:
Key business highlights from Budget 2021
Furlough scheme – the Coronavirus Job Support Scheme, or ‘furlough scheme’ as we all now know it, will be extended until September 2021 across the UK. This will provide further protection for furloughed employees as businesses get back to more normal trading once the main Covid restrictions are eased (hopefully, on 21 June 2021).
Corporation tax – corporation tax will increase to 25%, in order to balance the need to raise revenue with the objective of having an internationally competitive tax system. To support the recovery, the increase won’t take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
Self Employment Income Support Scheme – the Self Employment Income Support Scheme (SEISS) for self-employed people will be extended until September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time – previously, those with 2019-20 returns were not eligible for SEISS.
VAT cut extension – the VAT cut to 5% for hospitality, accommodation and attractions across the UK will be extended until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
Restart Grants – £5 billion will be available for the new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
Recovery Loan Scheme – a new UK-wide Recovery Loan Scheme is being introduced to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.
Film & TV Production Restart scheme – the Film & TV Production Restart Scheme will be extended in the UK, with an additional £300 million to support theatres, museums and other cultural organisations in England through the Culture Recovery Fund.
Business Rates Relief – 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.
Apprenticeships and training schemes – there will be an extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000. £7 million of funding has also been announced for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector. There’s an additional £126 million for 40,000 more traineeships in England, funding high-quality work placements and training for 16-24 year olds in the 2021/22 academic year.
Statutory Sick Pay costs – small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
Super-deduction – beginning from April 2021, the new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment. This is worth around £25 billion to UK companies over the two-year period the super-deduction will be in full effect.
Future Fund: Breakthrough– the £375 million UK-wide ‘Future Fund: Breakthrough’ will invest in highly innovative companies such as those working in life sciences, quantum computing, or clean tech, that are aiming to raise at least £20 million of funding.
Help to Grow scheme – a new Help to Grow scheme will be introduced to offer up to 130,000 companies across the UK a digital and management boost.
R&D tax reliefs – a review of research & development (R&D) tax reliefs will be made to make sure the UK remains a competitive location for cutting-edge research.
Talk to us about your Budget queries
Recovery is likely to be a protracted process, but there are measures contained in Budget 2021 that aim to kickstart this economic recovery, while providing support for UK businesses.
If you have any questions or queries about the measures announced in Budget 2021, please do get in touch with us. We’ll be happy to explain the opportunities, grants, reliefs and government support that’s available for your business.