Following the Budget 2021 announcement, find out what all small business owners need to know.
1. Business Loans – Recovery Loans Scheme
The BBL and CBILS schemes will be replaced by the Recovery Loans Scheme. The eligibility details of this will be released soon and the loans will be available from April onwards. It will provide 80% of government backed loans to businesses to help them borrow between “25,000 to £10m. If you have already received a loan under the existing schemes, you will be able to apply for the recovery loan. There will be no turnover restrictions, varying term loans and types of finance, up to 6 yrs of repayment and credit and fraud checks will be undertaken. More information to come on this.
2. Tax measures a super-deduction for companies investing in new plant and machinery
a time extension of the temporary increase to the SDLT nil rate band for residential property in England and Northern Ireland
an extension to the temporary 5% reduced rate of VAT for certain supplies
a temporary increase in the carry-back period for business losses
an increased rate of corporation tax from 2023.
3. Self-Employment Income Support Scheme extended
The Self-Employment Income Support Scheme is being extended to bring into line with the furlough scheme. This has ensured that more Self-Employed people will benefit from this extension - 600,000 newly self-employed people eligible for the grants. A fourth and fifth grant will be available before the end of September, giving people 80% of their average profits up to £7,500.
4.Furlough Scheme extended
The furlough scheme, which was meant to end in April and then July has been extended to the end of September. The scheme sees the government pay 80% of employees’ wages for those unable to work as a direct result of the coronavirus pandemic. The scheme will continue as is for now, with employers then having to contribute 10% from July, and 20% throughout August and September.
5. Business grants
The Chancellor announced a £5bn business grant programme to help hospitality and retail sectors reopen as lockdown ends. There will be an offer of up to £18,000 for hospitality businesses, gyms and leisure venues which have to remain closed for longer under the government's roadmap for easing lockdown. Restart Grants, worth up to £6,000 per premises, will be available to help non-essential shops and gyms reopen safely when permitted.
6. Business rates holiday extended
The 100% business rates holiday will be extended until the end of June 2021. After that, rates relief will still be available for smaller businesses, with a lower cap for businesses who have been able to stay open throughout.
7. Help to Grow scheme
Small businesses will be able to access discounted software licences and free training courses to help digital growth. Eligible businesses will be able to apply for vouchers for 50% off software licences up to £5,000.
8. Corporation Tax rises From 2023
Corporation Tax on profits over £50,000 will rise to 25%. Companies with profits of less than £50,000 will stay on the 19%.
The reduced rate of 5% for hospitality and tourism businesses will stay until the end of September, and then will rise to 12.5% for another 6 months, before going to 20% in April 2022.
10. Apprenticeship Bonus
The Apprenticeship Bonus scheme has been doubled to £3,000 per apprentice for employers.
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