Chancellor of the exchequer Rishi Sunak has announced a number of new measures in the British government’s 2021 budget to help support the UK’s economic recovery from the coronavirus pandemic.
Coronavirus Job Retention Scheme extended
The Coronavirus Job Retention Scheme has been extended until the end of September 2021.
Under the scheme, furloughed employees will continue to receive 80% of their wages until the end of September, although employers will now be expected to pay 10% of their wages in July, then 20% in August and September.
Self-Employment Income Support Scheme extended
Rishi has also confirmed that the Self-Employment Income Support Scheme (SEISS) has been extended, with a fourth grant to cover February to April, which is worth 80% of average trading profits up to £7,500.
Cash grants under the SEISS will also now be available to those who became self-employed during 2019-2020.
A fifth and final grant will also be available covering May to September, which those eligible will be able to claim from late July — this amount will be determined by how much a business’ turnover has been reduced from April 2020 to April 2021.
The fifth grant will be worth: 80% of three months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more; or 30% of three 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.
Business rates holiday extended
In addition, the business rates holiday in England has been extended until June 2021 — the exemption means retail companies in England will pay no business rates for three months from 1 April.
New Recovery Loan Scheme
As the government-backed Bounce Back Loan and Coronavirus Business Interruption Loan Scheme are to close at the end of March, the UK government has introduced a new Recovery Loan Scheme, which will enable eligible companies of any size to access loans and other kinds of finance up to £10 million per business.
The scheme will launch on 6 April and will be open until 31 December 2021. The available finance includes: term loans and overdrafts between £25,001 and £10 million per business; and invoice finance and asset finance between £1,000 and £10 million per business.
£5bn Restart Grant scheme for businesses
A £5 billion Restart Grant scheme has been launched to help businesses plan ahead and safely relaunch trading once the lockdown ends — the grant will be up to £6,000 per premises for non-essential retail businesses. The UK government is also providing all local authorities in England with an additional £425 million of discretionary business grant funding.
Help to Grow scheme
A new ‘Help to Grow’ scheme will also support up to 130,000 small and medium-sized businesses across the UK by providing the digital and management tools needed to innovate, grow and help drive recovery.
Extra funding for apprenticeships and traineeships in England
The government is providing an additional £126 million in England for 40,000 more work placements and training for 16-24 year olds in the 2021/22 academic year — employers will continue to be funded at a rate of £1,000 per trainee for all new 16-18 year-old apprentices and those aged under 25 with an Education, Health and Care Plan.
There is also an extension of the apprenticeship hiring incentive in England to September 2021 — employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will also now receive £3,000 per new hire.
A £7 million fund will also be introduced from July 2021 to help employers in England set up and expand ‘flexi-job’ apprenticeships, which will enable apprentices to work with a number of employers in one sector.
National Living Wage & Statutory Sick Pay Rebate Scheme
The National Living Wage will be increased to £8.91 from April 2021.
Under the current Statutory Sick Pay Rebate Scheme, small and medium-sized business employers in the UK (with fewer than 250 employees) can continue to reclaim up to two weeks of eligible, coronavirus-related Statutory Sick Pay costs per employee from the government.
Corporation tax to increase in 2023
In April 2023, the rate of corporation tax will increase to 25% — the rate will be tapered so that only businesses with profits of more than £250,000 will be taxed at the full 25% rate, while companies with profits of less than £50,000 will remain at 19%.
Super-deduction to cut business tax bill for investing in new equipment
Beginning April 2021, a new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment, which means they can reduce their taxable profits by 130% of the cost — this is worth £25 billion to companies over the two-year period the super-deduction will be in full effect.
An additional £2.4 billion will also be provided to the devolved administrations from 2021-22, with the Scottish Government receiving a £1.2 billion funding boost, while the Welsh Government will receive £740 million and the Northern Ireland Executive will receive £410 million.
Full details of the UK’s 2021 Budget can be found at imagesmag.uk/2021-Budget.