Your business guide to Budget 2021 – What were the key measures announced?

Restart Grant scheme

With the previous grant schemes ending on 31 March, the government will launch Restart Grants to help businesses reopen following the national lockdown. The value of these one-off cash grants will depend on the type of business. 

• Non-essential retail will be eligible to receive up to £6000 per premises
• Hospitality and leisure businesses including personal care and gyms will be eligible to receive up to £18,000 per premises

Local Authorities will also receive an additional £425 million of discretionary business grant funding to distribute. 

More information on this scheme including details relating to the eligibility for this grant will be announced in due course.  

Recovery Loan scheme – opens on 6 April 

The new loan scheme will replace the existing Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLs) which end on 31 March. It will enable businesses of all sizes to access term loans, overdrafts, invoice finance and asset finance up to £10 million with the government providing an 80% guarantee to the accredited lenders. 

More information on the scheme is available through the government website.

Future Fund: Breakthrough (launching in early summer of 2021)

This new £375 million scheme will encourage private investors to co-invest with government in the most innovative, R&D-intensive businesses (e.g. those working in life sciences, quantum computing, or cleantech) that are aiming to raise at least £20 million of funding. 

To be considered for the scheme you must be a UK based company with significant UK operations.

Further information on the Fund has been published on the British Business Bank website. 

Support for arts, culture and sports venues

• A £700 million package of support was announced to boost the arts, culture and sports sectors.
  
  
• The Film & TV Production Restart Scheme will be extended to 31 December 2021.

Community Ownership Fund – first bidding round will open by June 2021

• This new £150 million scheme will enable community groups to bid for up to £250,000 matched-funding to help them buy or take over local community assets (sports clubs, sporting and leisure facilities, cinemas and theatres, music venues, museums, galleries, parks, pubs, post office buildings, and shops) which are at risk of being lost, to run as community-owned businesses.
• More information on the scheme has been published on the government website. 

Coronavirus Job Retention Scheme (CJRS)

The furlough scheme has been extended to the end of September 2021. The scheme’s terms will remain the same for both employees and employers till 30 June. From 1 July, employers will be required to contribute 10% towards staff wages whereas this will increase to 20% in August and September respectively. 

A breakdown of the changes to the furlough scheme is available on the government website. 

Self-Employed Income Support Scheme (SEISS)

Fourth grant (February 2021 – April 2021) 

• The Chancellor confirmed that the fourth grant will cover 80% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits up to £7,500 in total.  
  
  

Fifth grant (May 2021 – September 2021)

• A fifth and final grant will be provided under the scheme 
• The value of the grant will depend on the percentage of turnover reduction in the year April 2020 to April 2021:
  • For self-employed with a turnover reduction of 30% or more, the grant will cover 80% of 3 months’ average trading profits, capped at £7,500
  • For self-employed with a turnover reduction of less than 30%, the grant will cover 30% of 3 months’ average trading profits, capped at £2,850

Individuals who were newly self-employed in 2019-2020 and who haven’t been eligible for support under the scheme so far, will now be able to claim the fourth and fifth grants provided they submitted their 2019-2020 Self-Assessment tax return by 2 March. 

More information on the fourth and fifth SEISS grants is available on the government website. 

Test and Trace Support Payment scheme

• The scheme which was created to support individuals on lower incomes who have been instructed to self-isolate and are unable to work from home will be extended until the summer.

Wages 

From April 2021, the National Living Wage will be increased to £8.91 per hour

Apprenticeships

• The apprenticeship hiring incentive will be extended to 30 September 2021 and payments will be doubled. This means that businesses hiring a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new apprentice hire regardless of age. 

Help to Grow scheme

• This new scheme will support SMEs providing opportunities to access management training and develop the digital skills needed to recover and grow. In addition, it will offer SMEs a voucher to cover up to half the costs of approved digital software (up to a max of £5,000). 
  
• For more information on the Help to Grow programme and to register your interest visit the government’s dedicated page, here.

Business Rates

• Eligible businesses in the retail, hospitality and leisure sectors, as well as nurseries, will not have to pay business rates until the end of June.
• From 1 July 2021 to 31 March 2022, businesses in these sectors will be eligible for a discount and will only be required to pay two-thirds of their business rates bill.  

VAT reduced rate 

• The temporary 5% reduced rate of VAT to certain supplies relating to hospitality, hotel and holiday accommodation and admissions to certain attractions will be extended to 30 September.
• From October 2021 and up until 31 March 2022 there will be an interim rate of 12.5%. Thereafter this will return to the standard rate of 20%. 

Corporation tax – changes taking effect from April 2023

• For businesses with profits of over £250,000 the rate of corporation tax will increase from 19% to 25%
• Businesses with profits of over £50,000 but under £250,000 will pay less than the main 25% rate
• For businesses with profits of £50,000 or less the rate of corporation tax will remain 19%

Income tax 

• The income tax Personal Allowance and the higher rate threshold will be increased next year but will then be maintained at that level until April 2026. 

Super-deduction (valid until 31 March 2023)

• This new measure will allow businesses to reduce their tax bill by 130% of the cost of investment in qualifying new plant and machinery assets. This will take effect from 1 April 2021 and will remain in place for two years. More information on the scheme is available on the government website.

Alcohol and fuel duties

• The planned increase on alcohol and fuel duties will not take place.

Environment

• The government will launch the first UK Infrastructure bank which will invest in public and private projects across the UK to finance the Green Industrial Revolution.   
• £15 billion will be issued in green bonds to help finance the transition to net-zero.
• The Chancellor also announced that the government will offer a Green retail National Savings and Investment (NS&I) product in the summer of 2021.

Housing

• Mortgage support – The scheme will be available for new mortgages up to 31 December 2022

The government will launch a new mortgage guarantee scheme in April enabling homebuyers to secure a mortgage up to £600,000 with a 5% deposit        

• Stamp Duty 

The temporary cut in Stamp Duty will be extended to September. More specifically, the £500,000 Nil Rate Band will end on 30 June, with the Nil Rate Band then being reduced to 250,000 until the end of September. A return to the standard £125,000 Nil Rate Band will take place on 1 October 2021. 

Benefits 

• Universal Credit 
  • The Universal credit uplift of £20 per week will be extended for an additional 6 months
    
  • The Universal Credit Minimum Income Floor suspension for self-employed Universal Credit claimants will continue until the end of July 2021. 

• Working Tax Credit

A new one-off £500 payment has been announced for eligible Working Tax Credit claimants. More information is available through the government website. 

Vaccines

•  £1.65 billion will be invested to support the vaccination roll-out
• A further £50 million will be provided to boost the UK’s vaccine testing capability. 

For more information on the COVID-19 vaccines, see our dedicated guide. 

To view the Chancellor’s full speech in the House of Commons, see here. 

 More information is available on the UK Government’s Coronavirus Business Support website. For more personalised advice call us on: 0161 237 4128 or email us at: [email protected] 

The information provided is meant as a general guide only rather than advice or assurance. GC Business Growth Hub does not guarantee the accuracy or completeness of this information and professional guidance should be sought on all aspects of business planning and responses to the coronavirus. Use of this guide and toolkit are entirely at the risk of the user. Any hyperlinks from this document are to external resources not connected to the GC Business Growth Hub and The Growth Company is not responsible for the content within any hyperlinked site.