Budget Recap: Business support, new schemes, and what else to check

Silverstone Technology Cluster

9th March 2021

The Chancellor delivered his Budget statement on Wednesday, pledging a range of new measures for large and small businesses. We’ve picked out some of his most important announcements to give you the lowdown on what help is available now, and in the months ahead.

Help and assistance right now

Tax breaks for investment: For the next two years, companies investing in qualifying new plant and machinery assets can reduce their tax bill with a so-called “super-deduction”. This lowers your company tax bill by 130% of the cost of the investment. Full details are here: https://www.gov.uk/guidance/super-deduction

More time for furlough: The scheme will run until the end of September. Workers will continue to receive 80% of hours not worked. Businesses must contribute 10% of the cost in July, then 20% in August and September.

New loan scheme: A new Recovery Loan Scheme will replace the current system of CBILS, BBLS and other support schemes. This will run from April until the end of 2021. Businesses of any size can apply for 80% government-backed loans of between £25,000 and £10 million. Business must be viable or deemed to be viable were “it not for the pandemic”.

Restart Grants: A new scheme provides a one-off payment of up to £6,000 per premises to non-essential businesses. Hospitality and leisure businesses can claim up to £18,000.

Cuts to business rates: The current 100% cut will continue until 30 June. After this, businesses that have been closed will be able to claim a two-thirds cut in rates (up to £2 million), with a lower threshold for those who have been able to remain open.

Incentives for apprenticeships: Companies that hire a new apprentice between April and September will receive £3,000 per new hire, compared with the previous £1,500.

Help in the future

Help to Grow programme: A new programme of training courses and practical assistance to boost company output. Programmes will be available in two areas:

·       Management – starting in June, a 12-week course run by leading UK business schools and offering practical courses, one-on-one mentoring, and an alumni network. The cost is 90% subsidised by the Government.

·       Digital – starting in the Autumn, a programme of free, impartial advice on using technology to boost performance. A voucher scheme will also be introduced offering 50% off approved business software up to a value of £5,000.

Sign up now to register your interest at https://helptogrow.campaign.gov.uk/

National Infrastructure Bank: For any company involved in the green or sustainable industries, this new bank will invest in public and private projects to finance the green industrial revolution. It will have an initial capitalisation of £12 billion, with potential for £40 billion of total investment. Full details on accessing finance are yet to emerge but initial details are here: https://www.gov.uk/government/publications/policy-design-of-the-uk-infrastructure-bank

What else to be aware of

Changes to corporation tax: Not every business pays this tax but if you do, changes are coming. In April 2023, the top rate will increase to 25%. However, any struggling business will be unaffected due to the definition of the tax.

Small businesses with profits of £50,000 or less will pay a small profits rate, maintained at the current rate of 19%. There will also be a taper above £50,000 so only companies with profits of £250,000 or higher will be taxed at the highest rate.

Potential changes to R&D tax relief: A consultation has been launched on the current system of incentives and reliefs for research and development. If you want to have your say, full details are here: https://www.gov.uk/government/consultations/rd-tax-reliefs-consultation

Further reading

Simply Business has a good round-up of announcements in longform here: https://www.simplybusiness.co.uk/knowledge/articles/2021/03/uk-budget-2021-for-small-business/

If you prefer video to text, then Deloitte’s consultants have also provided a good rundown of the impact on businesses here: https://taxscape.deloitte.com/spring-budget-2021/overview.aspx

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