CBILS and Bounce Back Loan schemes are to be replaced and new Restart Grants are to be introduced, Rishi Sunak outlined in the Budget today.
Speaking to the House of Commons, the Chancellor also listed a number of other changes and schemes that are set to be introduced as the UK looks towards its path out of the fight against Coronavirus.
Here’s a breakdown of what he said for businesses:
The furlough scheme will be extended until the end of September. Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond National Insurance and pensions required in May and June.
The government will introduce an employer contribution towards the cost of unworked hours, beginning with 10% in July.
self-employed incomes support scheme (SEISS)
A 4th grant covering February to April will be worth 80% of people’s average trading profits. The 5th and final grant from May will target support towards those most affected by the pandemic.
Those who became self-employed last year will also now be able to claim these grants.
recovery loan scheme
As the Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan scheme come to an end on March 31, they will be replaced by the Recovery Loan Scheme (RLS).
Under the scheme, businesses of any size can apply for loans from £25k up to £10m until the end of 2021.
The government will continue to provide an 80% guarantee for the loans.
Businesses that take on apprentices will now receive payments of £3,000 (up from £1,000) for all new hires of any age.
A new flexi-apprenticeship programme will allow people to work for a number of different employers in the same sector, with a focus on industries with flexible working patterns, such as the TV and film industry.
New grants will be made available to businesses that are looking to re-open. Non essential retail businesses are set to open first and will receive grants of up to £6,000.
This will then be followed by hospitality and leisure businesses, including personal care and gyms, which will be eligible for grants of up to £18,000.
All English local authorities will also receive £425m of discretionary business grant funding.
The 100% business rates holiday introduced last year for eligible businesses in the retail, hospitality and leisure sectors will continue to run until the end of June 2021.
For the remaining nine months of this year, business rates bills will be cut by two thirds, up to a value of £2m per business.
A vast majority of businesses will also receive a 75% cut in their business rates bill next year.
The reduced rate of 5% VAT for the hardest hit sectors will continue for another six months until 1st October.
From then, an interim rate of 12.5% will be introduced before returning to the normal rate of 20% in April next year.
In 2023, corporation tax, which is paid on company profits, for businesses that have profits of £250,000 or more will increase to 25%,
However, small businesses that have profits of less than £50,000 will instead pay a Small Profits Rate of 19%.
the 130% super deduction
For the next two years, when businesses invest in new equipment, they will be able to offset all of the cost against the tax, plus an additional 30%.
This will cut companies’ tax bills by 25p for every pound invested in new equipment, meaning taxable profits will reduce by 130% of the cost.
help to grow
The Help to Grow: Management scheme will see business schools across the UK offer MBA-style management training with 50 hours of tuition, mentoring and peer learning.
Businesses will have to pay £750 – 10% of the unit cost.
The Help to Grow: Digital scheme will help small businesses develop digital skills by giving them free advice and a 50% contribution towards the purchase of new productivity like enhancing software of up to £5,000 each.
culture recovery fund
An additional £300m will be made available for cultural organisations in England, including theatres, museums, heritage sites, festivals and music venues.
A total of £25m will also be pledged to funding grassroots football as part of the UK and Ireland’s 2030 World Cup bid.
If you need any further information or would like to speak to us regarding finance, email email@example.com, call 0115 958 6872 or fill in an enquiry form below.