05 Mar Coronavirus Support following the 2021 Budget
Following on from this week’s budget, Stoke Friday advocate Becky Nott, of Dean Statham Chartered Accountants, shares her key coronavirus support updates for businesses.
A total of £65 billion in additional fiscal support has been provided for in the Budget, giving a total of £407 billion in fiscal support for Covid-19.
Extended by five months, to the end of September from the end of April.
Under the scheme, the Government pays employees 80 per cent of their wages, up to £2,500 a month, if they are furloughed by their employer.
Employers must pay 10 per cent of these wages in July and 20 per cent in August and September.
Self-employed income support scheme
Grant number four from the Self-Employment Income Support Scheme (SEISS) covers the period from February to April, and it will be available to claim from April.
The money will be worth 80 percent of the three months’ average trading profits up to £7,500.
The fifth grant will cover the period from May onwards and will still be calculated on three months of average profits with the system open for claims from late July.
However, it will be more targeted, with people whose turnover has fallen by 30 percent or more continuing to receive full 80 percent grant; and people whose turnover has fallen by less than 30 percent will get a 30 percent grant.
As the tax return deadline has passed for the tax year 2019/20, more than 600,000 people who became self-employed in that year will be able to claim the fourth and fifth grants.
Universal Tax Credit
The £20 weekly increase to universal credit payments will continue for a further six months until September 2021.
Working tax credit claimants will receive equivalent support over the next six months through a one-off payment of £500, due to the way that system works operationally.
The Chancellor has announced a new ‘restart’ grant to help retail, hospitality and personal care businesses reopen from April.
Retailers, which are due to reopen from April, will be eligible for grants of up to £6,000 per premises.
Meanwhile pubs, restaurants and salons, which will be closed until June, will be able to claim grants of up to £18,000.
Recovery Loan Scheme
Today a new loan scheme was unveiled to support businesses hit by the pandemic, replacing previous emergency Government funding – Bounce Back Loans and Business Interruption Loans.
The Recovery Loans Scheme will offer loans from £25,000 to £10m up to the end of the year, with the Government providing lenders with an 80 per cent guarantee.
The business rates holiday for retail and hospitality firms will continue until the end of June.
For the remaining nine months of the financial year, business rates will be discounted by two thirds, up to a value of £2m for closed firms.
VAT applied to food – both eat in and takeaway – accommodation and attractions will continue to be cut to 5% for a further six months to 30 September.
This will be followed by interim rate of 12.5% for another six months.
The standard VAT rate of 20% will not return until April next year.
Stamp Duty Land Tax
Chancellor Rishi Sunak has announced an extension of the stamp duty land tax holiday until June 30.
This will be followed by a £250,000 nil rate band until September before returning to original £125,000 from 1 October 2021.
The Government will back mortgages for buyers with a deposit of just 5% on homes worth as much as £600,000.
It will launch next month and will be available for new mortgages up to 31 December 2022.