Chancellor Rishi Sunak has unveiled the contents of The Budget 2021 in the House of Commons
Outlining plans for the year ahead in The Budget 2021, Chancellor Rishi Sunak has announced new measures to help business and jobs through the pandemic, and to support the UK’s long-term economic recovery.
Furlough and support for self-employed
Due to end in June, the Coronavirus Job Retention Scheme (otherwise referred to as the furlough scheme) has been extended until the end of September, with the Government continuing to pay 80 per cent of employees’ wages for hours they cannot work. From July, employers will be asked to contribute 10 per cent, and 20 per cent in August and September.
From April, minimum wage will also increase to £8.91 an hour.
Support for the self-employed is extended until September. 600,000 more self-employed people are now eligible for help as access to grants is widened. The Self-Employed Income Support Scheme (SEISS) will now be open to self-employed people who filed a tax return for 2019/2020. Find out more here.
There will now be a fifth SEISS grant, covering May, June and July. You can apply for the fourth round of the grants from April, and the fifth round from July. These grants are for self-employed people with average profits of less than £50k, where at least 50 per cent of income comes from self-employment.
Tax and business support
£5bn in ‘restart grants’ have been announced to help businesses “reopen and get going again”, including grants for personal care businesses worth up to £18,000 per premises. These grants have been designed to help businesses which are unable to operate at full capacity, and do not need to be paid back.
A big blow for the hair industry was the news that the VAT rate will not be cut to five per cent. There will be no changes to rates of income tax, national insurance or VAT. The interim 12.5 per cent rate is to apply for the following six months.
Incentive payments for hiring new apprentices are to be doubled to £3,000, and £126m will be invested to triple the number of new traineeships.
Corporation tax on company profits is to rise from 19 per cent to 25 per cent in April 2023. The rate is to be kept at 19 per cent for about 1.5 million smaller companies with profits of less than £50k.
Tax breaks for firms to “unlock” £20bn worth of business investment have been announced, with Sunak announcing that companies will be able “deduct” investment costs from tax bills, reducing costs by 130 per cent. This should cover investments such as equipment.
Business rates holidays for firms in England are to continue until June, with a 75 per cent discount after that.
“Since the third lockdown this January, we have seen a worrying 227 per cent increase in requests for financial support during January and February, based year-on-year. Even after today’s announcement and the 12 April opening date in the roadmap, we know that our support will be required for months to come,” explains Hair & Beauty Charity president Samantha Grocutt.
The British Beauty Council hosted a webinar (click HERE to watch) which goes into further detail about what The Budget means for beauty businesses, including the news that local authority grants are freeing up more money that was previously with-held.
Find out more about the Cover-19 business support available across the UK.