Budget 2021: further support for small businesses announced
With over 700,000 job losses and the highest public spending levels since World War II, focus has now shifted to how the economy will recover from the impact of COVID-19. Chancellor Rishi Sunak has today set out the UK Government’s plans for tax and spending in this year’s budget.
New measures were announced to help business and jobs through the pandemic and to support the UK’s long-term economic recovery. The Chancellor also revealed a series of tax-raising plans to help rebalance the public finances.
Here at Tide, we know how many small businesses have struggled during the pandemic. Today’s budget brought some welcome news in that Government support for small businesses featured heavily. A raft of new measures and support initiatives were announced to help businesses get back on their feet.
As already reported, the Government’s Job Retention Scheme (furlough) is to be extended, along with the self-employed support scheme. A new loan scheme is to be introduced and there will be support for small businesses to invest in training and software.
Ways in which the Budget 2021 will affect your small business
- The Job Retention Scheme (Furlough) extended to the end of September 2021
- From July, employers will have to contribute 10% of employees salaries, this rises to 20% in August and September
- The Self-Employed Income Support Scheme will also be extended to the end of September
- A 4th grant will cover February to April, worth 80% of average trading profits (up to £7,500). A 5th grant will be available from July.
- People who filed a tax return in 2019-20 will now be able to claim for the first time
- Restart Grants will be introduced, with a one off cash grant of up to £18,000 for businesses in England within the following sectors:
- Personal Care
- A new UK-wide Recovery Loan Scheme will be launched to help businesses of all sizes through the next stage of recovery
- The scheme will offer loans of between £25,001 and £10 million, as well as asset and invoice finance
- Help to Grow initiative announced, including:
- Help to Grow Management – management training for small business leaders from business schools across the UK. The Government will contribute 90% of the cost
- Help to Grow Digital – free expert training and 50% discounts on productivity software – you can sign up today at https://helptogrow.campaign.gov.uk/
- There will be an extension to the VAT cut to 5% for hospitality, accommodation and attractions until the end of September, followed by a 12.5% rate until 31 March 2022
- Business rate relief – 750,000 qualifying businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief
- Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
Get advice before you make decisions about tax
We may be experts with looking after business current accounts, but when it comes to making business decisions, we rely on the advice and experience of financial experts. We recommend you do the same and always speak to your accountant or advisor for tax matters.
Read more from UK financial journalists
To get the lowdown and full analysis of UK Budget 2021, we’ve highlighted some of the coverage from trusted media organisations and commentators:
The BBC lists the key points for an at-a-glance summary: Summary of Budget 2021
The Financial Times provides live updates, giving the views of industry experts on each policy too.
You can find an at-a-glance summary in The Guardian, together with a more in depth analysis of how the Chancellor will start to recover the financial costs of the pandemic.
The Telegraph also outlines the Budget 2021 main points, along with more detailed analysis.
Meanwhile, SMEWeb provides reports reactions from industry experts (including Tide!) on the impact of today’s policy announcements.
Business Leader also provides its own analysis with predictions on what the coming months may bring for UK businesses.
Read more from the UK Government
HM Treasury‘s full policy paper on Budget 2021 covers every aspect in detail, including full details on the support packages unveiled for small businesses.
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Photo by Heidi Fin published on Unsplash