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On 3 March 2021, Chancellor Rishi Sunak announced a raft of plans and policies to support people and businesses through (what are hopefully) the final stages of the Covid-19 pandemic.
As well as an extension to the Stamp Duty holiday and extended support for self-employed workers, the Spring Budget includes a range of additional support for small businesses, in particular struggling high street businesses.
Here’s a round-up of the main announcements that could benefit your small business.
The Coronavirus Job Retention Scheme (also known as the Furlough Scheme) has been extended to the end of September. This will allow employers to continue placing employees on temporary leave as an alternative to making them redundant due to coronavirus.
However, furlough support will be tapered. Until July, employers can continue to claim up to 80% of an employee’s salary for hours not worked. Then, employers will be required to contribute 10% for hours not worked in July and 20% for hours not worked in August and September.
The year-long business rates holiday was originally supposed to end on 31 March. After this, only businesses forced to shut due to coronavirus would be eligible for rates relief.
However, many have criticised the ‘cliff edge’ that ending the holiday so abruptly would cause. The Institute of Chartered Accountants in England and Wales (IACEW) recently reported that just 1 in 4 of its retail, hospitality and leisure clients would be able to pay their business rates in full at the end of March.
To avoid this, the Chancellor has extended the holiday to 30 June in England. This should allow businesses to stay afloat for a while longer, although many fear that the new deadline only delays the ‘cliff edge’. In Wales, a full 12-month business rate holiday has been announced for retail, hospitality and leisure businesses for 2021-2022.
Corporation Tax is increasing to 25% in 2023. However, small businesses with profits of £50,000 or less will continue to pay the current rate of 19%. For businesses with profits over £50,000, the rate will be tapered upwards with only businesses with profits over £250,000 paying the full 25%.
This means that only 10% of businesses will pay the full 25% rate.
Also tax-related – the 5% VAT reduction has been extended until 30 September. A reduced rate of 12.5% will then apply between 1 October and 31 March 2022. This should allow businesses to adapt to a return to the standard rates from 1 April 2022.
There will be a £5 billion grant scheme to help high street businesses in England reopen after lockdown. Non-essential retail businesses will be eligible to claim up to £6,000. Hospitality businesses, which will open later, could claim up to £18,000. In total, around 700,000 businesses in England will be eligible for the grant.
With a number of the Government’s Covid-19 business support schemes coming to an end in March, a new Recovery Loan Scheme has been announced to continue supporting businesses.
The new scheme will run until 31 December 2021, although this could be extended if necessary. Under the scheme, businesses could be eligible for a loan facility of up to £10 million. Businesses that have already utilised other loan schemes, including the Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme, will also be able to access the new Recovery Loan scheme.
With hospitality venues hit the hardest by the Covid-19 pandemic, the Chancellor has announced a £150 million scheme to help communities save their local businesses.
Communities will be able to bid for up to £250,000 to rescue a local pub or social club and the Government will match the money raised.
The Government is introducing a plan to help businesses increase productivity, efficiency and digital skills. The Help to Grow plan includes:
Although not announced in the Budget, the recent announcement on commercial evictions will also be of interest to many small businesses. The Government has extended the ban on commercial property evictions for a further three months until the end of June 2021.
This extension will come as a relief for many businesses struggling with rent arrears, particularly those forced to close due to coronavirus.
Do you own or run a small business? At Glanvilles, our specialist team of corporate and commercial solicitors can provide a practical, bespoke service for you. We can provide advice about all legal aspects of running a small business, including: