Government Support for Re-opening of Businesses
The Government has announced a comprehensive package of measures that will support the safe and successful reopening of our high streets & seaside resorts - giving local economies a vital kickstart ahead of a great summer. The Government are introducing a suite of measures, which builds on the support already delivered to help the retail & hospitality sector, including:
- A new £56 million Welcome Back Fund will give councils the funding they need to boost tourism, improve green spaces and provide more outdoor seating areas, markets and food stalls, with part of the funding specifically allocated for coastal areas across England. Locally, the regional allocation for the Welcome Back Fund is £6.1 million for the East of England.
- Providing an initial 70 councils with targeted, hands-on support from our High Streets Task Force, an elite team of high street experts who will advise them on how to adapt to changing consumer demands, so they can continue to thrive in the years ahead.
- Giving businesses such as pubs and restaurants the flexibility to set up marquees and extra outdoor seating - that can be kept up for the whole summer rather than the 28 days currently permitted - as well as introducing a series of fairer parking measures that will encourage people to return to high streets and town centres.
For more information new raft of measures to prepare our high streets and seaside resorts for summer, please visit: https://www.gov.uk/government/news/new-raft-of-measures-to-prepare-our-high-streets-and-seaside-resorts-for-summer.
Budget 2021 – Business Support
Coronavirus Job Retention Scheme (CJRS)
To support businesses and employees across the UK through the next stage of the pandemic, the Government is extending the CJRS for a further five months from May until the end of September 2021. Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond National Insurance contributions (NICs) and pensions required in April, May and June. From July, the Government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September, as the economy reopens.
To check if you can claim for wages through the Coronavirus Job Retention Scheme and find out how to claim, please visit: https://www.gov.uk/government/collections/coronavirus-job-retention-scheme.
Self-Employment Income Support Scheme (SEISS)
To support the self-employed across the UK through the next stage of the pandemic, the Government confirms that the fourth SEISS grant will be worth 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500 in total. The grant will cover the period February to April, and can be claimed from late April. Self-employed individuals must have filed a 2019-20 Self Assessment tax return to be eligible for the fourth grant. This means that over 600,000 individuals may be newly eligible for SEISS, including many new to self-employment in 2019-20. All other eligibility criteria will remain the same as the third grant. Further details will be published in due course.
The Government announces that there will be a fifth and final SEISS grant covering May to September. The value of the grant will be determined by a turnover test, to ensure that support is targeted at those who need it the most as the economy reopens. People whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. The final grant can be claimed from late July. Further details will be published in due course.
To find out if you’re eligible for the fourth grant and for information about the fifth grant, please visit: https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension.
The Government will provide ‘Restart Grants’ in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses, giving them the cash certainty they need to plan ahead and safely relaunch trading over the coming months. The Government is also providing all local authorities in England with an additional £425 million of discretionary business grant funding, on top of the £1.6 billion already allocated. Altogether, this support will cost £5 billion. This brings the total cost of cash grants provided by the Government to £25 billion.
VAT Deferral New Payment Scheme & VAT reduction for the UK’s tourism and hospitality sector
Any business that took advantage of the original VAT deferral on VAT returns from 20 March through to the end of June 2020 can now opt to use the VAT Deferral New Payment Scheme to pay that deferred VAT in up to eleven equal payments from March 2021, rather than one larger payment due by 31 March 2021, as originally announced.
The Government will extend the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30 September 2021. To help businesses manage the transition back to the standard 20% rate, a 12.5% rate will apply for the subsequent six months until 31 March 2022.
Business rates reliefs & Business rates repayments
The Government will continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. Nurseries will also qualify for relief in the same way as other eligible properties. When combined with Small Business Rates Relief, this means 750,000 retail, hospitality and leisure properties in England will pay no business rates for 3 months from 1 April 2021, with the vast majority of eligible businesses receiving 75% relief across the year.
Local authorities will be fully compensated for the loss of income as a result of these business rates measures and receive new burdens funding for administrative and IT costs.
The Government will legislate to ensure that the business rates relief repayments that have been made by certain businesses are deductible for corporation tax and income tax purposes. This will ensure that these businesses are no worse off from a tax perspective than if they had paid the business rates in the first place. This will apply for repayments made to the devolved administrations as well as to those made in relation to England.
Income tax exemptions for COVID-19 tests and home office expenses
The Government will extend the income tax exemption and NICs disregard for COVID-19 antigen tests provided by, or reimbursed by, employers and for employer reimbursed expenses covering the cost of home office equipment, to the 2021-22 tax year.
Recovery Loan Scheme
From 6 April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses. The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.
For more information on the Government’s Recovery Loan Scheme, please visit: https://www.gov.uk/guidance/recovery-loan-scheme.
Statutory Sick Pay (SSP) Rebate Scheme
Small and medium-sized employers across the UK will continue to be able to reclaim up to two weeks of eligible SSP costs per employee. This scheme is a temporary COVID-19 measure intended to support employers while levels of sickness absence are high. As with other business support schemes, the Government will set out steps for closing this scheme in due course.
To check if you can claim back Statutory Sick Pay paid to employees due to coronavirus (COVID-19), please visit: https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19.
Trade Credit Reinsurance scheme
The Trade Credit Reinsurance scheme has successfully maintained the vast majority of trade credit insurance coverage across the market throughout the pandemic, across the whole of the UK. Up to £190 billion of cover on around half a million businesses has been provided under the scheme. The Government will continue to review the impacts of the scheme to assess whether there is a case for further interventions beyond the scheduled end date of 30 June 2021, in order to minimise disruptions in insurance coverage as the economy recovers.
Extended loss carry back for businesses
To help otherwise-viable UK businesses which have been pushed into a loss-making position, the trading loss carry-back rule will be temporarily extended from the existing one year to three years. This will be available for both incorporated and unincorporated businesses.
- Unincorporated businesses and companies that are not members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22
- Companies that are members of a corporate group will be able to obtain relief for up to £200,000 of losses in each of 2020-21 and 2021-22 without any group limitations
- Companies that are members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22, but subject to a £2 million cap across the group as a whole
- This will be legislated in the forthcoming Finance Bill. Further detail on the group cap will be announced in due course.
For more information on the ‘Extended Loss Carry Back for Businesses’, please visit: https://www.gov.uk/government/publications/extended-loss-carry-back-for-businesses.
Contactless payment card limit
To further support UK consumers and businesses during the COVID-19 response, and following a public consultation by the Financial Conduct Authority, the Government has approved an increase to the legal contactless payment limits previously set by the European Commission. This will allow banks to support single contactless payments up to £100, and cumulative contactless payments up to £300, without the need for customers to input their chip and pin. The Government looks forward to the banking industry implementing the new limits later this year.
Help to Grow
Help to Grow: Management
The Government will offer a new UK-wide management programme to upskill 30,000 SMEs in the UK over three years. Developed in partnership with industry, the programme will combine a national curriculum delivered through business schools with practical case studies and mentoring from experienced business professionals. Over 12 weeks, and 90% subsidised by Government, this programme will equip SMEs with the tools to grow their businesses and thrive.
Help to Grow: Digital
The Government will launch a new UK-wide scheme in the autumn to help 100,000 SMEs save time and money by adopting productivity-enhancing software, transforming the way they do business. This will combine a voucher covering up to half of the costs of approved software up to a maximum of £5,000, and free impartial advice, delivered through an online platform.
For more information on the Government’s ‘Help to Grow your business’ scheme, please visit: https://helptogrow.campaign.gov.uk/.
High quality traineeships for young people
The Government will provide an additional £126 million in England for high quality work placements and training for 16-24 year olds in the 2021/22 academic year. Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee.
Payments for employers who hire new apprentices
The Government will extend and increase the payments made to employers in England who hire new apprentices. Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire, compared with £1,500 per new apprentice hire (or £2,000 for those aged 24 and under) under the previous scheme. This is in addition to the existing £1,000 payment the Government provides for all new 16-18 year-old apprentices and those aged under 25 with an Education, Health and Care Plan, where that applies.
Supporting apprenticeships across different employers
The Government will introduce a £7 million fund from July 2021 to help employers in England set up and expand portable apprenticeships. This will enable people who need to work across multiple projects with different employers to benefit from the high-quality long-term training that an apprenticeship provides. Employers themselves will also benefit from access to a diverse apprenticeship talent pipeline. Employers will be invited to bring forward proposals here, and in particular the Creative Industries Council will be asked to do so in recognition of the potential benefits of this new approach for the creative sector.
Piloting new technologies to help people find jobs
The Government will invest £1.3 million over 2021-22 and 2022-23 to pilot the use of new technologies to support in- or out-of-work people to find new job opportunities which are best suited to their skills and experience.
Publishing the Low Pay Commission’s 2021 Remit
The Government has published its remit for the Low Pay Commission (LPC) for 2021. The remit asks the LPC to make UK-wide recommendations with the aim of reaching the Government’s target for a National Living Wage (NLW) of two thirds of median earnings, extended to those aged 21 and over, by 2024, provided economic conditions allow.