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Budget 2021

Furlough scheme extended until the end of September 2021

Workers will continue to receive 80% of their hours not worked. Businesses must contribute 10% of the cost in July, then 20% in August and September.

A new £5 billion Restart Grants scheme

This will provide a one-off payment of up to £6,000 per premises to non-essential business. Hospitality and leisure businesses can claim up to £18,000, reflecting the larger impact of prolonged restrictions that are in place.

Coronavirus support (business)

Hospitality and tourism businesses will continue to benefit from a 5% cut in VAT until 30 September 2021. This will be followed by an interim rate of 12.5% until 31 March 2022, when it will return to the standard rate. Small and medium-sized employers will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay costs per employee from the government.

Recovery Loan Scheme

This will replace CBILS, BBLS and other business support schemes from April 2021 until 31 December 2021, subject to review. Businesses of any size can apply for 80% government-backed loans of between £25,000 and £10 million from a set of accredited lenders, to be confirmed in due course. The loans will be made up of term loans and overdrafts between £25,001 and £10 million per business, and invoice and asset finance between £1,000 and £10 million per business. No personal guarantees are needed on loans up to £250,000. Business must be viable or deemed to be viable were “it not for the pandemic”. The 100% cut in business rates will continue until 30 June 2021. After 30 June businesses that were required to close on 5 January 2021 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.

Business tax changes

Small businesses with profits of £50,000 or less will pay a small profits rate, maintained at the current rate of 19%. There will be a taper above £50,000 so only companies with profits of £250,000 or higher will be taxed at the highest rate – only 10% of companies will pay this. Any business that took advantage of the original VAT deferral on returns from 20 March through to the end of June 2020 can now opt to use the VAT Deferral New Payment Scheme to pay that deferred VAT in up to eleven equal payments from March 2021, rather than one larger payment due by 31 March 2021, as originally announced. Businesses can carry back tax losses of up to £2 million for up to 3 years, to help with cash flow. Businesses can claim tax refunds of £760,000.

Skills and wages

The National Living Wage will be increased to £8.91 from April 2021.

Employers who hire a new apprentice between April and September 2021 will receive £3,000 per new hire, compared with £1,500 per new apprentice hire under the previous scheme. There will be an additional £126 million in England for high quality work placements and training for 16-24 year olds in the 2021/22 academic year. A Help to Grow scheme has been launched to support 130,000 SMEs with the tools they need to become more productive through access to management training and free advice on how to improve digital capabilities, with vouchers to buy approved software. At Avant & Co we are doing everything we can to help our business community. If you would like to discuss how the changes may affect you or your business, please do not hesitate to call us on 020 8951 5713 or email us on info@avantaccountants.co.uk