The 2021 Budget Update

After the budget announcement yesterday there’s lots of changes to many of the Covid 19 support schemes and some new ones to get our heads around. We’ve provided below a quick summary of some of the schemes affecting our small businesses clients. If you want more information on anything we’ve talked about below or something else send us a message and we’ll be happy to help.

Furlough Scheme

The scheme which pays 80% of wages for hours employees cannot work up to a maximum of £2,500 per month was due to end in April but has now been extended until September 2021.

The government will continue to pay 80% of wages for any hours not worked until the end of June.

In July the employer will be asked to contribute 10% with the government paying 70%.

For August and September the employer will be asked to contribute 20% with government paying the remaining 20%

Self Employment Income Support Scheme

A fourth self-employment support grant will be available to apply for from April which covers 80% of average trading profits for February, March & April. This will be capped at £7,500

The government has said it will widen its eligibility criteria as previously this was limited to those who had filed a tax return for 2018/19 but they have now said that some who have filed a tax return for 2019/20 may be eligible to apply.

There will also be a fifth and hopefully final grant available to apply for in July which will cover May to September.

The value of grant will be determined by how much turnover has fallen:

If turnover has fallen by more than 30% the grant will be 80% of average profits capped at £7,500.

If turnover has fallen by less than 30% the grant will be 30% of average profits capped at £2,850

VAT

The reduction in VAT to 5% for food and drink sold within the hospitality industry will continue until the end of September. It will then increase to 12.5% but still below the normal rate for a further six months until the end of March 2022.

Business Rates Relief

The business rates holiday for those in the hospitality and leisure industry will continue until June. It will then be discounted by two thirds until the end of March 2022.

NEW Business Restart Scheme

Under the new scheme non-essential retail businesses could receive grants of up to £6,000.

Hospitality and leisure businesses could receive grants of up to £18,000. Higher because they've had to remain closed for longer.

The Chancellor also announced the introduction of a new loan recovery scheme which allows businesses to apply for loans from £25,000 up to £10 million to help support them with their recovery.



Further information and guidance on some of these schemes will be published in due course and we’ll update you as these become available.

If you need any help or support with your businesses finances please email us to see how we can help.

fiona@bookkeeperbuddy.co.uk