It’s been a tough year for businesses across the UK, and today’s Spring Budget has been eagerly anticipated by business owners keen to see how far government support will go to help the economy recover from the pandemic.
The chancellor Rishi Sunak has laid out plans for the 2021 UK budget this afternoon and there were several important points for SME’s to keep in mind.
The budget, which was eagerly watched by many all over the UK, detailed plans to extend the furlough scheme and continue the increased Universal Credit for another six months. The population will also see the minimum wage rise to £8.91 starting from April.
Here are the key takeaways for businesses.
The Budget broken down for UK business owners
Are the following measures good news for your business?
Extension to the Coronavirus Job Retention Scheme
The government’s Coronavirus Job Retention Scheme will be extended until September 30, 2021. It will pay 80% of employees wages, but businesses are expected to contribute 10% of an employee’s wages from July and 20% from August.
Extension to the Self-Employed Income Support Scheme
The Self-Employed Income Support Scheme was set up to help the self-employed in the same way the Coronavirus Job Retention Scheme helps employees. It provides up to 80% of three months’ average trading profits, capped at £7,500. The latest payments will also cover anyone who became self-employed in 2019-2020, which could help more over 600,000 additional self-employed workers.
Increase in corporation tax
Corporation tax will increase from 19% to 25% in from April 2023.
The 25% rate will only hit businesses that record profits of more than £250,000. Any business that earn more than £50,000 but less than £250,000 in profits will pay a lower rate, and those that earn £50,000 or less in profits will continue to pay the 19% rate.
This will ensure only around 10% of the UK’s largest and most profitable companies will be hit with the highest rate.
New Recovery Loans Scheme
There’ll be no extension to the Bounce Back Loans and CBILS loans deadline. Both end on March 31 and will be replaced by the Recovery Loans Scheme. This will offer loans of between £25,000 and £10 million, all of which will have 80% backing from the government.
Other key takeaways include:
- £3,000 apprentice bonus for businesses
- VAT remains at 5% for the hospitality sector until September 31, 2021.
- Grants of £6,000 to help businesses reopen. Up to £18,000 available for leisure and hospitality businesses.
- No increase in the tax on alcohol
- No increase in fuel duty
- Business Rates holiday will continue to June 30 for hospitality sector