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Covid business support schemes

Effective as of 19 July 2021, restrictions related to the Covid-19 pandemic on social contact, life events, and business premises have been lifted by the UK Government. From this date, the UK Government will enable businesses and individuals to make decisions on how they wish to manage risks relating to the pandemic. 

There are still several business support schemes that will remain open for businesses following the lifting of restrictions in July 2021. Details of these can be found below.

Changed or extended schemes

 

Job Retention Scheme open to the end of September 2021

The Job Retention Scheme will continue to remain open after the economy unlocks in July, with the scheme staying in operation until the end of September 2021. The amount an employee receives for hours not worked will remain at 80% of salary, up to £2,500 per month. Employers will need to continue paying NICs and pension contributions until the end of September. There will be additional contributions for employers to make to the scheme from July, with employers contributing 10% of wages in July and 20% in August & September.

Self Employed Income Support Scheme

The SEISS will also cover the period to the end of September 2021. At the March 2021 Budget, the UK Government confirmed two further grants for the self-employed would be paid out. A fourth taxable grant worth 80% of 3 months’ average trading profits, capped at £7,500, was available to eligible business to cover the period from February 2021 to April 2021. A “fifth and final grant” covers May to September. Payments will depend on how much your turnover has been reduced in the year April 2020 to April 2021. This grant will be worth either 80% of 3 months’ average trading profits (capped at £7,500) for those with a turnover reduction of 30% or more, or 30% of 3 months’ average trading profits (capped at £2,850) for those with a turnover reduction of less than 30%. Eligibility will now be based on your submitted 2019 to 2020 tax return.

VAT cut for hospitality and tourism sector extended

The application of the temporary reduced rate (5% down from the 20% standard rate) for goods and services supplied by the hospitality sector will be in operation until the end of September 2021. To provide further support to these sectors, there will be an interim VAT rate of 12.5% for another 6 months, which will be in place until the standard returns for these goods and services in April 2022.

Business rates relief for businesses in the retail, hospitality and leisure sectors

Many of the businesses in the retail, hospitality and leisure sectors that benefited from 100% business rates relief until the end of June 2021 will continue receive reduced rates. For eligible businesses, rates will be discounted by 2/3rds until 31 March 2022, with the following limits. The 66% relief will be capped at £2m per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. More details can be found here.

Additional support measures announced at March 2021 budget

 

£5bn grant scheme of Restart Grants

Beginning in April, for retail hospitality and leisure businesses. Grants of up to £6,000 per premises for non-essential retail businesses in England will be made available. Hospitality, accommodation and leisure premises in England can get higher grants of up to £18,000 as these businesses will have been required to stay closed for longer. Grants will be administered by local councils.

Recovery loan scheme

Launching on the 6 April and open until 31 December 2021, the ‘Recovery Loan Scheme’ has replaced the previous system of Bounce Back Loans and CBILS. Businesses of any size will be able to apply for loans between £25001 and £10m per business, backed by an 80% Government guarantee. The scheme will be provided by accredited lenders.

Super-deduction tax break for firms looking to invest in plant and machinery

To help stimulate investment, from 1 April 2021 businesses investing in plant and machinery will be permitted to reduce their tax bill by 130% of what they spend on these investments. This ‘super-deduction’ will be effective for the next 2 years until 31 March 2023.

Help to Grow Scheme

A new scheme to help SMEs with productivity and digitisation which will launch by the Autumn of 2021, where businesses can apply for vouchers to support technology and management software purchases. See below for more details.

Help to Grow scheme


As part of the new support announced for businesses in the UK – the chancellor has outlined the help to grow scheme to launch in Autumn 2021.


The scheme consists of 2 main aspects, Help to Grow Digital and Help to Grow Management.

The Help to Grow Digital will launch with free expert and impartial advice in technologies, alongside this the scheme will also introduce vouchers of 50% for investment in productivity enhancing technology (up to £5,000).

Initially the vouchers are expected to be made available for software that supports businesses in:

  • Building customer relations
  • Make the most of selling online
  • Manage their accounts and finances digitally

The voucher is expected to be made available to businesses that employ between 5 and 249 employees, are registered at Companies House, have been trading for more than 12 months, and are purchasing software for the first time. The scheme is expected to support 100,000 SMEs over a 3-year period.

Help to Grow Management is expected to launch in June, and will see SME business leaders be able to access a 12 week programme delivered by the UK’s leading schools to help with development of key strategic skills. Modules will include financial management, innovation and digital adoption.

30,000 places will be available over 3 years. The programme is 90% subsidised by government – with participants being charged £750 to participate. Full details of the scheme are expected to be released this summer. More detail can be found here, where you can register your interest in the scheme.

Tax increases

 

In order to offset the spending and support made available to businesses throughout the pandemic, the government have announced a number of tax increases to come into effect over the coming years.

Corporation Tax


Corporation tax will be increased from 19% to 25% from April 2023 for companies with profit over £50,000. Businesses with profits below £50,000 will continue to pay 19%.

For businesses with profits over £50,000 there will be a taper in place between £50,000 and £250,000 gradually increasing the amount of tax applied. Only businesses with a profit in excess of £250,000 will be impacted by the full 25% tax rate.

Personal Tax


The government have announced that personal tax will be frozen. The basic allowance will continue to increase to £12,570 as planned, however this will remain in place until 2026.

The higher rate threshold will also be increased to £50,270 but will then also be frozen until 2026.

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