The budget yesterday seemed relatively well received ahead of the big reopening of many salons and clinics in April. Here are the key highlights we felt are most relevant;
- NEW Recovery Loan Scheme – From 6th April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million. This will be available to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.
- NEW Restart Grants to Help Businesses Reopen – Non-essential retail businesses will receive grants up to £6,000 per premises. Hospitality and leisure (which includes personal care and gyms) can each receive grants of up-to £18,000 (where they are impacted by restrictions and may not open until later this year).
- Furlough – extended to the end of September 2021
Workers can continuing to receive 80% of their current salary for hours they don’t work due to being furloughed. This will come in the form of a grant to employers who will make a contribution of 10% of the worker’s salary for unworked hours in July and 20% contribution in August and September. The £2,500 monthly limit for the grant remains
- Coronavirus Business Interruption Loan Scheme (CBILS) are closing as planned this is closing on 31st March 2021
- Minimum wage – increasing to £8.91 an hour from April 2021
- Corporation Tax – will remain at 19% for business profits up-to £50,000. There will be a tapered increase to 25% for profits over £250,000 from April 2023.
- VAT Threshold – This remains at £85,000 until 2024
- Business Investment Tax Relief & Loss Relief – A new “super-deduction” tax relief was announced. The normal loss carry-back rules extended from one year to three years for losses of up to £2 million.
- Rates Relief – Eligible retail, hospitality and leisure properties in England will continue to receive 100% business rates relief from 1st April 2021 to 30th June 2021. 66% business rates relief will be applied for the period from 1st July 2021 to 31st March 2022, capped at £2 million per business for properties that were required to be closed on 5th January 2021, or £105,000 per business for other eligible properties.
- Support for the self-employed – This has been extended until September
- Credit updates – £20 weekly uplift in Universal Credit worth £1,000 a year to be extended for another six months. Working Tax Credit claimants will get £500 one-off payment
- Tax-Free Allowance – Basic allowance will increase to £12,570 from April 2021, and then it will stay at that level until 2026. The Higher Rate threshold will increase to £50,270 and will then also be frozen to 2026.
- National Insurance – In the 2021/22 tax year the new National Insurance thresholds are: Primary Threshold/Lower Profits Limit increases to £9,568, Upper Earnings Limit (UEL)/Upper Profits Limit increases to £50,270, No changes were announced to the rates of Income Tax or National Insurance
We hope that the news of further grants and on-going support via schemes such as Furlough and Rates relief, this is positive news ahead of the re-opening. With further discretionary grants available from local councils, the key is having a strong business plan for when you open your doors.
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