The Chancellor set out new measures yesterday in the Government budget 2021 to help businesses and jobs through the pandemic and to support the long-term economic recovery. Here are the main points from the budget, please visit Gov.uk for the full budget.
The Coronavirus Job Support Scheme
The Coronavirus Job Support Scheme has been extended to 30 September 2021. The level of grant available to employers under the scheme will stay the same until 30 June 2021.
The level of grant will be reduced from 1 July 2021 and you will be asked to contribute towards the cost of your furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, which is capped at £2,500 per month for the time they spend on furlough. You can continue to choose to top up your employee’s wages above the 80% total and cap of £2,500 for the hours not worked at your own expense.
From 1 July 2021, the grant will be 70% of your employee’s wages for hours not worked, capped at £2,187.50. From 1 August 2021 until 30 September the grant will be 60% for hours not worked, capped at £1,875.
Self Employed Income Support Scheme
The Self Employed Income Support Scheme (SEISS) has been extended to September 2021. The 4th grant will be set at 80% of 3 months’ average trading profits and covers the period February, March and April 2021. This grant will be paid out in a single instalment and capped at £7,500. The 4th grant will take into account 2019/2020 tax returns and will be open to those who became self employed in the tax year 2019/2020.
Your eligibility for the scheme will now be based on your submitted 2019/2020 tax return. This may affect the amount of the 4th grant, which could be higher or lower than previous grants you have received.
There will be a 5th and final grant covering May to September 2021. If you are eligible for the 5th grant you will be able to make a claim from late July 2021. The 5th grant will be determined on how much your turnover has reduced in the year April 2020 to April 2021.
The fifth grant will be worth:
- 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
- 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%
Further details will be provided on the fifth grant in due course.
5% vat for Hospitality, Accommodation and Attractions.
The vat cut to 5% for hospitality, accommodation and attractions across the UK has been extended until the end of September 2021. From 1 October 2021, the vat rate will be 12.5% until 31 March 2022. The vat rate will then go back to the standard rate from April 2022.
Business Rates
The business rates holiday in England has been extended by an additional three months and starts from 1 April 2021.
The Restart Grant
The Chancellor announced a new grant available on the Government Budget 2021, which begins in April. The Restart Grant is a one-off cash grant aimed at helping businesses that have had to close due to lockdown restrictions as a result of the coronavirus pandemic. Non-essential retail businesses will be eligible for up to £6,000 per premises to help them reopen. Those due to reopen later in hospitality, leisure, personal care and gyms can receive up to £18,000. This will depend on your rateable value.
Corporation Tax
The rate of Corporation Tax paid on company profits will increase to 25 per cent. The new rate won’t be introduced until April 2023. Small businesses with profits of £50,000 or less will continue to pay the current rate of 19%.
The Recovery Loan Scheme
This is a new scheme and will be available UK-wide. The scheme will launch on 6 April 2021 and will be open until 31 December 2021, this is subject to review. The loans available are between £25,001 and £10 Million. Asset and invoice finance will be made available between £1,000 and £10 million. This is to ensure businesses of all sizes are helped through the next stage of recovery. Loans will be made available through a network of accredited lenders, whose names will be made public in due course.
Apprenticeship Hire Incentive
An extension to the apprenticeship hiring incentive scheme was also announced for England to September 2021, with an increase of payment to £3,000.
Help to Grow Programme
Also announced in the Government budget 2021 was the new Help To Grow programme. This programme is designed to help small and medium sized businesses across the UK learn new skills, reach new customers and boost profits. There are two programmes available one on management and one for digital. For more information and to register for the Help To Grow programme please visit the Help To Grow website.
For more information on what we have mentioned or anything else please don’t hesitate to contact us.