Let’s talk about THE CHANCELLORS BUDGET announced on 3rd March 2021. It cannot be doubted that this was the most important budget announcement in decades and there is still a lot more to be discussed, confirmed, denied and debated. As with all budgets, there will be follow ups, reviews and a lot more information to digest, so as time goes on real time updates will be posted to our Facebook and YouTube channels. Make sure you follow and subscribe to be kept up to date with all the news, dates and details relevant to your business. But for now, lets go through the main points announced on Wednesday.
- FURLOUGH EXTENSION – Furlough has been extended until September 2021. Whereas previously the government were covering 80% of the employees wage for hours they are unable to work, they will reducing that amount and asking employers to supplement, 10% and 20% as time goes on. The aim is to be in line with the easing of lockdown, so as business pick up work and things start to return to normal, your employees can be given more hours and Furlough will ease off. You need to be PLAN AHEAD to see how you will cover these costs and prepare for your GRAND REOPENING!
- SEISS GRANT 5 – We expected Grant 4, and we got it, which is great, and as hoped we also got Grant 5, which means those 600,000 excluded business owners will now be able to get some financial support. As ever, some would say this is too little too late, as the newly self employed have been without any government aid for nearly a year. But, if you submitted your first SATR by the extended deadline of February 28th, you will now be eligible for the SEISS Grants. There are some caveats to the amount you can claim with grant 5, which we will discuss in more detail on our social media.
- INCOME TAX FREEZE – The personal allowance and higher rate tax thresholds are due to be increased in 2022 and will then be fixed until April 2026. Although the chancellor claims this will mean peoples take home pay will not be affected, in real terms this may not be the case due to the inflation rate and predicted economic growth. Although, it sounds good, in actual fact it could lead to more people paying more tax as they fall into higher tax brackets as time goes on.
- REDUCED RATE VAT – This measure was a huge bonus to many businesses in the hospitality, travel and retail sectors during lockdown and is set to be extended until September, it is said it will then gradually increase to 12.5% for some before returning to normal in 2022. We are waiting on the specific details of this and who is affected and will keep you updated as soon as we know more.
- RECOVERY LOAN – With the end of the BBL and the CBILS loans schemes, the government are introducing the Recovery Loan scheme. It is still government backed, but the terms and criteria have changed. Check carefully, as these are not as favourable as the BBL were, before applying.
- RESTART GRANT – This is to continue the reduction on business rates which has been a big lifesaver for many businesses. Take advantage of this grant as soon as you can, it will launch in April 2021 and we will let you know who can apply, how to apply and where to do so shortly.
- CORPORATION TAX INCREASE – The nail in the coffin. We expected to hear a slight Corp Tax rise, but nothing on this scale, though the increase does come with certain conditions. The chancellor has announced Corporation tax will increase from 19% to 25% in 2023. However, he said this rate will apply only to companies with profits over £250,000, companies with profits under £50,000 will not be affected YET! And if you are in between the two, then you will have an in between rate. This change does not take affect now, but I do advise every limited company to run new forecasts to see how this change will affect you later on and are there any changes you can make now to help your business keep its money.
- SOLO LIMITED COMPANY DIRECTORS – Absolutely nothing said in terms of support for this EXCLUDED group of business owners. Frankly I am disgusted and am continuing the campaign with #ForgottenLtd to fight for parity.
I’d love to hear your thoughts on the budget announcement, how you have been affected by the pandemic and if any of the measures announced this week have helped or will help you and your business. Please drop your comments on our socials. Have a good day, stay safe, stay strong!