featured image

Rishi Sunak announced the latest Budget on 3rd March 2021. In addition to the general tax changes, further COVID support measures were also announced.  These are predominantly extensions or tweaks to existing schemes in place, but we have summarised the main announcements below.   

Please refer also to our other COVID support pages for additional detail on the support measures announced previously (links are at the bottom of the page). 

Furlough extension to 30 September

The furlough scheme has been extended to 30 September, giving employers comfort that some support will be available well beyond the proposed roadmap to lifting the restrictions. 

The terms will largely be the same as they are currently, with employees receiving at least 80% of their wages.  However, employers will be expected to contribute 10% in July, and 20% in August and September, towards the overall costs.

For periods from 1 May 2021, employers can also claim for employees who were employed on 2 March 2021 (where they previously did not qualify for the scheme), as long as a PAYE Real Time Information (RTI) submission was made which included them between 20 March 2020 and 2 March 2021.

SEISS – 600,000 more self-employed individuals will become eligible for government support

The government previously announced in November 2020 that there would be a fourth instalment of this grant and at the Budget 2021 they announced a fifth and final instalment. The fourth instalment will again be set at 80% of 3 months’ average trading profits and will be available from mid-April. Access to the grant has however been widened and will now take into account trading profits from 2019/20 tax returns and will open to those who became self-employed during the 2019/20 tax year. The rest of the eligibility criteria remains unchanged. Further details will be provided on the fifth grant in due course. 

Restart Grants

A further £5bn will be provided to businesses in England to help them ‘relaunch trading’ as restrictions are lifted through the coming months.

Non-essential retail businesses will be provided up to £6,000 per premises, whilst up to £18,000 per premises will be provided for hospitality, accommodation, leisure, personal care and gym businesses.

In line with previous grants, these will be made available by local councils and will be in addition to support grants which continue to be provided for certain closed businesses (lasting until the end of March). 

Recovery loan scheme

With the BBLS and CBILS scheme coming to an end, the Chancellor has announced that a new ‘Recovery Loan Scheme’ will be rolled out from 6th April 2021 and stay in place until the end of the year.

The new scheme is very similar to the CBILS offering in terms of eligibility, finance terms and the 80% government guarantee, however businesses will be required to meet the costs of interest payments and any fees associated with the facility. 

Businesses can apply for between £25,001 to £10 million for term loans and £1,000 to £10 million for asset finance. No Personal Guarantees will be needed for loans up to £250,000. 

VAT reduction in hospitality and leisure

The reduced rate of 5% will continue until 30 September, after which the rate will become 12.5% for a further 6 months, before returning to the Standard Rate, which is currently 20%, in April 2022. 

Business rates holiday

Eligible businesses with retail, hospitality and leisure properties in England will get 100% business rates relief from April 2021 to June 2021. Thereafter until March 2022, this will reduce to 66% 

HMRC officers

Finally, although not support related, the Chancellor announced that up to 1,000 new HMRC officers will be put in place to target fraud by individuals and businesses claiming under various COVID support measures. 

This is a clear message that tax payers should ensure they are entitled to benefit before claiming any support measure.  If in doubt, please get in touch. 

 

Additional information

We refer to our previous guidance on various measures below.  Please get in touch with your usual Shorts contact if you have any questions in respect of how these measures will affect you.

All relevant and related information can be found in our COVID-19 Information Hub, which contains details of the support currently available, who can claim and details of how to access it, our guides cover what businesses need to know right now.

author

David Robinson

As a Tax Partner, I advise clients on all aspects of UK tax, ranging from business taxes, transactions and private client matters, helping to achieve the objectives and aspirations of businesses and their owners.

View my articles