The Chancellor Rishi Sunak has announced his 2021 budget for the UK, covering how the country will recover from the coronavirus pandemic.
Let’s outline what the budget statement and its measures mean for founders, startups and small businesses:
Furlough Scheme extended
The furlough scheme, which was meant to end in April, will be extended to the end of September. The scheme sees the government pay 80% of employees’ wages for those unable to work as a direct result of the coronavirus pandemic. The scheme will continue as is for now, with employers then having to contribute 10% from July, and 20% throughout August and September.
Self-Employment Income Support Scheme extended
The Self-Employment Income Support Scheme is being extended to align with furlough, with 600,000 newly self-employed people eligible for the grants. Two more grants will be available before the end of September, giving people 80% of their average profits up to £7,500.
Corporation Tax rises
From 2023, Corporation Tax on profits over £50,000 will rise to 25%. Companies with profits of less than £50,000 will stay on the 19%.
VAT
The reduced rate of 5% for hospitality and tourism businesses will stay until the end of September, and then will rise to 12.5% for another 6 months, before going to 20% in April 2022.
Business Loans
The Bounce Back Loans and CBILs schemes will be replaced by the Recovery Loans scheme, which will provide 80% government-backed loans to businesses to help them borrow between £25,000-£10m - through to the end of the year. If you've already received a loan under the existing schemes, you'll still be able to apply for a Recovery Loan.
Business grants
The Chancellor announced a £5bn business grant programme to help hospitality and retail sectors reopen as lockdown ends. Restart Grants, worth up to £6,000 per premises, will be available to help non-essential shops and gyms reopen safely when permitted. There will also be an offer of up to £18,000 for hospitality businesses, gyms and leisure venues which have to remain closed for longer under the government's roadmap for easing lockdown.
Business rates holiday extended
The 100% business rates holiday will be extended until the end of June 2021. After that, rates relief will still be available for smaller businesses, with a lower cap for businesses who have been able to stay open throughout.
Help to Grow scheme
Small businesses will be able to access discounted software licences and free training courses to help digital growth. Eligible businesses will be able to apply for vouchers for 50% off software licences up to £5,000.
Apprenticeship Bonus
The Apprenticeship Bonus scheme has been doubled to £3,000 per apprentice for employers.
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