Spring Budget help for businessesPosted 2021 by Chris Davies
A summary of measures by Maddy Weeks, a Manager in our Newbury office
Today the chancellor announced continued support for businesses and self-employed individuals on the roadmap to normality.
The furlough scheme has been extended until 30th September 21.
The government will continue to support the cost of employee’s wages until 30th September 2021.
Employers can claim the 80% grant for hours not worked up until 30th June 2021, following this the government support will taper and will ask businesses to contribute towards wages until the scheme ceases in September.
For July, the government will provide 70% of the cost of the employees’ wages and in August and September this support will taper to 60% with employer’s topping up wages to 80%.
A 5th and final Self employment income support scheme grant (SEISS).
The fourth grant will work in the same way as the third grant. Individuals can claim a taxable grant worth 80% of their average trading profits and will cover the period February – April 2021, provided demand has been reduced as a result of coronavirus.
A fifth and final grant has been announced and will cover May onwards, applications will open for claims in late July.
This final grant factors in the level that the pandemic has affected demand for self employed individuals.
If there has been a drop of 30% or more in turnover (not profit) then individuals will be entitled to a grant to cover 80% of their trading profits for a three month period.
If however the decrease in turnover is under 30%, the grant will be restricted to 30% of trading profits for this period.
The big change to the self-employed grants, is those who were previously ineligible for the scheme having become self-employed in 19/20, will now be eligible for the fourth and fifth SEISS grants provided their tax return for 19/20 has been submitted by midnight 2nd March 2021.
Restart Grant in April
As current government grants for business cease at the end of March, a new Restart Grant has been announced in April.
Up to £6,000 grant per business premises for non-essential retail which can reopen in April.
Up to £18,000 grant for hospitality, leisure and personal care businesses which can reopen in June.
New recovery loan scheme
A new recovery loan scheme has been announced this will be available to any size business. Businesses can borrow £25,000 – £10,000,000 and can apply for this loan up until the end of this year, this will be 80% backed by the government.
Business rates holiday
The 100% business rates holiday for retail, hospitality and leisure sectors will continue for the first three months of the year, up until the end of June.
For the next 9 months business rates will be discounted by two thirds up to £2,000,000 for closed businesses. The cap will be lowered for businesses that have been able to remain open.
Reduced VAT rate for hospitality and tourism
The 5% reduced VAT rate for the hospitality industry has been extended for six months until 30th September.
Following this an interim reduced VAT rate of 12.5% will be introduced to cover the next six-month period, returning to 20% on 1 April 2022.
if you have any questions regarding this article or the support available to businesses affected by the coronavirus please contact your local Ross Brooke office