What does the Spring Budget 2021 mean for your business?
This week the Chancellor, Rishi Sunak, delivered his Spring Budget to Parliament. As expected, there was encouraging news for businesses, particularly his decision to extend the furlough scheme, provide further business grants and a new loans scheme.
Some of the key points for businesses are summarised below.
The furlough scheme will be extended until the end of September. The Government will continue to pay 80% of wages up to £2,500 per month until 1 July, after which the Government will pay up to 70% of wages, with employers being required to contribute 10%. State support will reduce again with effect from 1 August, when employers will be required to contribute 20%. For employees, there is no change, they will continue to receive 80% of their salary until the scheme ends.
- Government-backed loan schemes
A Recovery Loan Scheme has been announced, as the Bounce Back Loan scheme and others come to an end this month. Businesses of any size will be eligible to apply for loans from £25,000 up to £10M, with the Government providing an 80% guarantee to lenders. The promotes recovery and aims to prevent company closure and will launch on 6 April and conclude at the end of the year.
- Business rates relief
Temporary cuts for businesses in the hospitality, retail and leisure sectors will be extended until the end of June. For the remaining nine months of the year, business rates will be discounted by two thirds, and up to a value of £2M for businesses affected by closure.
- Business grants
A new restart grant will be available to certain businesses from April, another measure which may prevent company closures. Non-essential retail businesses are set to open first and will be eligible for grants of up to £6,000 per premises. Hospitality and leisure businesses (including hairdressers, beauty salons and gyms) will open later and will be offered grants of up to £18,000. English local authorities will be provided with an additional £425M of discretionary business grant funding.
There was further support for businesses in the hospitality sector. The temporary reduction of VAT from 20% to 5% will continue until the end of September. Following this, an interim VAT rate of 12.5% will be in place for up to six months, until April 2022.
You can read full details of the Chancellor’s Budget proposals here.
Although these measures are welcome, for some businesses they may not be sufficient to secure a viable future. If you are worried about the future of your business, perhaps even considering company closure, then it is important to seek early advice.
Keywood Group is a Licenced Insolvency Practice and our team has extensive experience in dealing with company closures or helping you to assess the alternative options available. If you want further information, please contact us for a no obligation chat.