Written by Leigh Foster
As expected, a lot of positive news came out of the budget 2021 announcement, especially the continued support for businesses across the UK. With the extension of the furlough scheme now being 30th September 2021 and a further 600,000 people having access to self-employed support, will be crucial as we recover from the pandemic.
Some of the key points from Rishi Sunak, were as follows:
Small businesses to be exempt from increase in corporation tax
Effectively, any small business with profits of £50k or less will be exempt from the increase in corporation tax to 25 percent from 2023. This will mean that around 70% of companies will be exempt from the corporation tax hike. In addition to this, a tapered rate will 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 percent rate.
Recovery Loan Scheme
A new Recovery Loan Scheme will be launched which replaces the existing Government-guaranteed Covid-19 financial support schemes that have supported £73bn of lending to date that is due to close at the end of March 2021. The new Recovery Loan Scheme is scheduled to run until December 31, 2021. Details of the scheme below:
- Up to £10m facility per business: There will be a maximum value of a facility provided under the scheme of £10m per business. The minimum facility size will vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts
- Turnover limit: There will be no turnover restriction for businesses accessing the scheme
- Wide range of products: Businesses will now be able to choose from a variety of products such as term loans, overdrafts, asset finance, and invoice finance facilities
- Term length: Term loans and asset finance facilities are available for up to 6 years, with overdrafts and invoice finance available for up to 3 years
- Interest and fees to be paid by the business from the outset: Businesses will be required to meet the costs of interest payments and any fees that are associated with the facility
- Credit checks for all applicants: Lenders will be required to perform credit and fraud checks for all applicants. When making their assessment, lenders may overlook concerns over short-to-medium term performance owing to the pandemic.
Coronavirus Job Retention Scheme
This will be extended until September 2021.
Claims for furlough days in February 2021 must be made by 15 March 2021. You can no longer submit claims for claim periods ending on or before 31 October 2020.
Self-Employment Income Support Scheme
The Self-Employment Income Support Scheme (SEISS) will continue with a fourth and a fifth grant. The Chancellor announced that more than 600,000 people, many of whom became self-employed in 2019-20, may now be able to claim direct cash grants under SEISS.
A caveat to this is self-employed company directors who pay themselves in dividends rather than PAYE were again excluded from support.
Business rates holiday
The business rates holiday in England has been extended by an additional 3 months. This means that 750,000 retail, hospitality, and leisure sites in England will pay no business rates for 3 months from 1st April 2021 when combined with Small Business Rates Relief, with further relief available for the rest of the year.
All of the above is great news for UK-based businesses, as we recover from the Coronavirus pandemic. The Chancellor's initiatives will be essential in the coming months in mobilising and recovering the UK workforce and economy.
If you are looking to increase your workforce, Pertemps Managed Solutions has many services we can provide, but also currently supply into numerous sectors such as IT, logistics, Covid support sites, administration, and many more. For more information, visit our website or call us on 0800 011 2783.