Covid-19 Support
Coronavirus Job Retention Scheme (Furlough): extended until the end of September – on current terms until 30th June, then employers will be expected to pay 10% in July towards the hours their staff that do not work, rising to 20% in August and September.
Self-Employment Income Support: Fourth Self-Employment Income Support Scheme grant will be available to claim from next month worth 80% of three months’ average trading profits up to £7,500). People who filed 2019-20 tax returns – will be eligible for the fourth and fifth grants of the scheme. Fifth SEISS grant covering May-September with a turnover test.
Restart Grant: cash grants of up to £18,000 to firms in retail, hospitality, accommodation, leisure and personal care. Non-essential retail businesses will get up to £6,000 per premises.
Discretionary business grant: Additional £425m of funding for Local Authorities to distribute.
5% reduced rate of VAT for hospitality and tourism: extended for six months to 30th September. There will then by an interim rate of 12.5% for another six months .
Business rates: 100% business rates holiday through to the end of June. For the remaining nine months of the year, business rates will still be discounted by two thirds, up to a value of £2m for closed businesses and £105k for other eligible properties.
Statutory Sick Pay (SSP) Rebate Scheme: the scheme will continue with details on steps for closing this scheme to be set out in due course.
Income tax exemptions: exemptions for COVID-19 tests and home office expenses extended to the 2021-22 tax year.
Support for Airports: Airports and Ground Operations Support scheme renewed for a further six months from the start of 2021-22.
Business Taxation
Corporation Tax: will increase from 19 per cent to 25 per cent in April 2023. Companies with profits under £50,000 will remain at 19 percent, meaning only 10 percent of companies will pay the higher rate.
Super deduction: for the next two years, when companies invest they may reduce their tax bill by 130 percent of the cost.
Trading loss carry-back rule: temporarily extended from one to three years for losses of up to £2m.
Bank surcharge: review to make sure the combined rate of tax on UK banks does not increase significantly and they remain internationally competitive.
VAT threshold: VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2022.
Fuel Duty: frozen for 2021-22.
Access to Finance
Recovery Loan Scheme: From 6 April 2021, the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million. This replaces the CBILS and BBLS schemes which close at the end of March.
Contactless payments: the legal limit on single payments will rise from £45 to £100.
Future Fund: companies with high R&D intensity that are aiming to raise at least £20m of funding will be eligible to apply for HMG investment.
Education and Skills
Apprenticeships: employer incentives: the cash bonus scheme for hiring apprentices will rise to £3K per hire, regardless of the apprentice’s age and extended by 6 months to September 21 (age 16-24 rises from 2k to 3K and over 25s rises from £1.5K to £3k).
New Flexi job Apprenticeship: £7m from July 2021. Individuals will be linked to an agency, instead of a single employer, and take on different jobs with multiple businesses in one sector. Aimed at sectors such as the creative
industries.
Traineeship: £126 million to triple the number of traineeships – creating an extra 40,000 in 2021/22. Eligibility expanded to those with Level 3 qualifications. Employer incentive payment of £1,000 per trainee.
Labour Market
New ‘fast track’ visa for highly skilled workers: those with a job offer from a ‘recognised high-growth’ firm will qualify for a visa, without the need for sponsorship or third-party endorsement.
‘Global Talent’ Visa: reform giving international prize winners and those showing early promise automatic qualification.
Statutory Sick Pay: UK SMEs can continue to claim 2 weeks of eligible SSP, from day 1 of illness, as temporary measure until further notice.
Low Pay Commission remit published: the National Living Wage target is 2/3 of median earnings, and eligibility lowered to age 21 by 2024.
Other announcements
Freeports: new freeports announced including Liverpool City Region to encourage free trade with simpler planning, lower taxes, cheaper customs and infrastructure funding.
New National Infrastructure Bank: will be capitalised with £12bn of equity and debt capital and be able to issue up to £10bn of guarantees. The bank will begin operating in an interim form in spring 2021 and will be headquartered in Leeds.
Levelling Up Fund: prospectus launched, inviting bids from local areas for local infrastructure projects which improve “everyday life”.
Town Deals: £1bn for 45 new Town Deals including £25m for Leyland and £20.9m for Preston.
£220m UK Community Renewal Fund: prospectus launched to support communities to pilot programmes and new approaches as Government moves away from EU Structural Funds to the UK Shared Prosperity Fund.
Consultation on R&D Tax reliefs and enterprise management incentives: HMT has issued a consultation to look at possible improvements. One is to bring data and cloud computing costs within the scope of the relief.
R&D Tax Credit: from accounting periods beginning on or after 1 April 2021 the amount of SME payable R&D Tax Credit will be capped at £20,000 plus three times the business’ total PAYE and NICs liability.
Read the Chamber’s response to the Budget.
Does this budget help you?
If you have any feedback on how the budget will affect your business let us know: call 01772 706582 or email geoffm@lancschamber.co.uk.
