How will the Spring Budget impact your business?
The Chancellor, Rishi Sunak, has laid out plans for the 2021 UK Spring Budget this afternoon, and there were several important points for SME's to keep in mind.
The impact of the coronavirus pandemic meant this was arguably one of the most important Budget announcements in generations, the Chancellor detailed plans to extend the furlough scheme and continue the £20 Universal Credit uplift for another six months. The National Living Wage will also increase to £8.91 an hour from April.
Rishi Sunak was eager to make clear that support was out there for the UK’s small businesses, many of whom have been hit especially hard by the pandemic and lockdown restrictions.
But what exactly are the plans to succeed, and will they really help SMEs to get back on their feet?
The Spring Budget breakdown for SMEs
The Chancellor announced the following measures to help businesses reopen and recover from the pandemic:
- Help To Grow Scheme - £520 million will be put into the ‘Help to Grow’ scheme. Eligible small firms will be able to register to learn vital technology and management skills with 90% of the training funded by the government.
- Coronavirus Job Retention Scheme extension - The furlough scheme will be extended until September 2021. The government will cover 80% of employees’ wages, but businesses will need to contribute 10% of an employee’s wages from July, and 20% from August.
- More Self-Employed Worker Support - There was also an announcement offering help for self-employed workers who slipped under the net and were unable to claim support from the government during the lockdowns. Now, anyone who became self-employed in the years 2019-2020 will be able to access support. This is expected to aid over 600,000 more self-employed workers.
- Corporation Tax Increase - Corporation tax is set to increase to 25% in 2023, but this is only set to affect 10% of the UK’s largest and most profitable companies, meaning that many SMEs won’t be affected. If a business has a profit of under £50,000, the tax will remain at 19%.
- Updated Apprentice Incentives - Businesses will be paid up to $3,000 for every apprentice they take on, to ensure that the UK’s apprentice scheme continues to thrive, and businesses can access more valuable workers.
- No VAT changes - VAT is to be kept at 5% for the hospitality sector until 31st September 2021.
- More Grants for Leisure and Hospitality - Grants will be made available to eligible businesses, up to the amount of £6,000 for shops and £18,000 for leisure and hospitality businesses.
- No increase in alcohol or fuel duty - There will be no increase in the tax on alcohol this year, this includes beer, wine and spirits. Fuel duty will also be frozen.
- The Replacement of CBILS - Although the CBILS and Bounce Back Loans will be coming to an end soon, they will be replaced by the Recovery Loan Scheme. Loans are available for borrowing between £25,000 to £10 million, and applications will be open to businesses of any size throughout 2021.
- Business Rates Holiday to Continue - The Business Rates Holiday is set to carry on through until June 30th for hospitality sectors.
Have your say on the Spring Budget
What are your thoughts on Rishi Sunak’s Spring Budget? Does the support go far enough? Should there have been more support for business owners where non-salary costs are concerned, such as rent, insurance, etc.?