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Chancellor Extends Furlough And Loan Schemes
The furlough scheme has been extended until the end of April 2021 and the government-guaranteed Covid-19 business loan schemes will now run until the end...
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Job Retention Focus For Budget 2021
In his 3 March Budget, Chancellor Rishi Sunak set out a £65 billion plan to support jobs and businesses emerging from the Covid pandemic. We pick out the most important bits for business owners and self-employed.
Sunak extended the furlough, self-employed support and business grants & loans schemes. There were also VAT cuts - but not for home improvement products and services.
Delivering the budget, the Chancellor said: "This Budget meets the moment with a three-part plan to protect the jobs and livelihoods of the British people. First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis. Second, once we are on the way to recovery, we will need to begin fixing the public finances. And third, we will begin the work of building our future economy.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme will be extended to September. From now until June there will be no real difference (employees get 80 per cent for hours not worked while the employer pays for the hours they do work). In July the government contribution for hours not worked goes down to 70 per cent with the employer having to pay 10 per cent of the hours not worked (to a maximum of £312.50). Then in August and September, the government contribution goes down to 60 per cent and the employer's contribution rises to 20 per cent (to a maximum of £625).
SEIS 4
The Self-Employment Income Support Scheme (SEISS) will continue with a fourth and a fifth grant. Three SEIS grants have already been made available. The fourth grant can be applied for at the end of April (or possibly the beginning of May - a government announcement will be made).
At the Budget it was confirmed that the fourth SEISS grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020 (about 600,000 people). The rest of the eligibility criteria remain unchanged.
The eligibility for the scheme will however be based on your submitted 2019 to 2020 tax return - and thus this may affect the amount of the fourth grant which could be higher or lower than previous grants you may have received.
You must also have traded in both 2019 to 2020 and 2020 to 2021 and must be currently trading but are impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus. You must declare that you intend to continue to trade and you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus.
You must have submitted your 2019 to 2020 tax return by 2 March 2021.
SEIS 5
There will be a fifth and final grant covering May to September.
You will be able to claim from late July if you are eligible for the fifth grant.
The amount of the fifth grant will be determined by how much your turnover has been 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 or 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%.
Warning
The government has allocated £100 million on a Taxpayer Protection Taskforce to crack-down on fraudsters who have exploited Covid support schemes
Business rates holiday
The business rates holiday in England has been extended by an additional three months from 1 April - so retail installers will benefit. Small Business Rates Relief is available for the rest of the year.
Recovery Loan Scheme
A new Recovery Loan Scheme will be launched to replace the existing government guaranteed schemes that are closing at the end of March - details will be released in due course.
Trainees and apprentices
As part of the government’s 'Plan for Jobs', the Chancellor is increasing support with £126 million of new money to enable 40,000 more traineeships and doubling the cash incentive to firms who take on an apprentice to a £3,000 payment per hire. There will also be a £7 million scheme so apprentices can work for more than one firm on a 'flexi-job' programme.
Corporation Tax
The rate of Corporation Tax will increase to 25%. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19%. A tapered rate will also be introduced for profits above £50,000, so that only businesses with profits of £250,000 or greater will be taxed at the full 25% rate.
Beginning April 2021, a new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment.
Income tax
Income tax personal allowance and the higher rate threshold will rise next year as planned and will then be maintained at that level until April 2026. If wages rise, more people could find themselves in the higher - 40 per cent - tax bracket.
Wages, fuel and booze
The National Living Wage will be increased to £8.91 from April. Fuel duty will be frozen again and there will be a freeze in duty rates for beer, cider, wine and spirits.
Vaccine
An extra £1.65 billion will go into the vaccination programme, with the Chancellor saying a speeded up programme will get people back working sooner.
Let's get technical
130,000 small and medium sized businesses will be supported through a new Help to Grow scheme, providing digital and management tools either free or at discounted rates.
Picture: Chancellor Rishi Sunak
Article written by Cathryn Ellis
03rd March 2021