The announcement of a new budget is always a key talking point in the best of times.
With the current COVID-19 pandemic having such an impact on people’s livelihoods and businesses, and hot on the heels of the government’s recently published roadmap, there was much intrigue to see what would happen next from a financial standpoint.
In a recurring theme of the pandemic, many of the new measures were leaked during the build-up hours before Rishi Sunak, Chancellor of the Exchequer and MP for Richmond (Yorks), stood before parliament to deliver the news.
So, what does the outlook for the next six months look like? What grants or loans are available for your business and what kind of business rates will you be paying?
Following correspondence from our customers, we have handpicked and answered some of their key burning questions below.
I have seen the news that the furlough scheme has been extended until September, are the terms still the same?
Despite the promising headlines coming out of the government’s roadmap, it was clear a removal of restrictions would not ensure an immediate return to normality for many businesses.
The government has acknowledged that many SME firms will not be able to return to full staff capacity straight from the off. For this reason, they have extended the current furlough scheme with some slight alterations.
The current scheme continues unaltered until June, with the government continuing to cover 80% of furloughed worker’s wages.
From July onwards, for any colleagues placed on furlough, your business will be asked to contribute 10% of their salary in July, rising to 20% in August and September.
I was ineligible for self-employment grants previously, has that changed moving forward?
In previous budgets, some self-employed businesses were ineligible for support grants due to their inability to complete in full a 2019-20 tax return in time. If you were one of these, and you have since filled your tax return prior to midnight of 2nd March 2021, you could be one of 600,000 self-employed people now able to apply for the fourth and fifth Self-Employment Income Support Scheme (SEISS) grants.
The fourth SEISS grant will run for three months from February until April, worth 80% of three months’ average trading profits up to £7,500 in total. A fifth and final grant will be available from May onwards, worth three months of average profits and will be open to claimants from late July.
Your business will be able to apply for the grant in late April via the gov.uk website.
My business has been shut for much of the last 12 months. What is the Business Restart Scheme? And is my business eligible?
The Business Restart Scheme is a new £5 billion grant designed to help small businesses throughout the lockdown.
Launching in April, the restart grant is tailored for non-essential small businesses such as hair salons, pubs, gyms and hotels that have been unable to function during the previous two lockdowns.
If your business is one of the shops able to open on 12th April, you can apply for a grant of up to £6,000 per premises to help your business reopen.
If your business is due to open later (hospitality etc), you can apply for a grant up to £18,000. The size of the grant you are entitled to depends on rateable value in both instances.
Please note, as of writing the Business Restart Scheme is only eligible for firms in England.
Will we still be paying reduced business rates when lockdown restrictions are lifted? Or will things return to normal?
In what the chancellor referred to as a “£6 billion tax cut for businesses”, he announced that the business rate relief will continue for another three months until the end of June. For those of you eligible, from July onwards you will only be required to pay 33% of your normally rates until the end of the year.
Most businesses in the hospitality, retail, leisure, and childcare industries are eligible. The criteria can be found via the government’s website.
Regarding VAT, the cut to 5% for hospitality and tourism businesses will also remain until September. After that, it will increase to 12.5%, before returning to the usual 20% in April of next year.
Much has been made regarding the increase in Corporation Tax in 2023, does this mean I will be paying more?
It completely depends on the size of your business. Yes, from April 2023 the rate of Corporation Tax paid on company profits will increase from 19% to 25%, however, this will only impact businesses with profits that exceed £50,000.
At present, the treasury has calculated that this should only impact 10% of UK businesses.
Find out more
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