Chancellor Rishi Sunak delivered his Budget yesterday, 03 March 2021. The announcements all pointed to prioritising restoring the economy, supporting both jobs and businesses. There are key considerations for business leaders, particularly those who are benefiting from using “furlough” and will need to continue to use the scheme until their sector recovers and staff return to full working.
We’ve outlined a few key elements that may affect UK businesses. All business owners need to be aware of these points.
Extension to the Coronavirus Job Retention Scheme
As expected, a further extension to the Coronavirus Job Retention Scheme, also known as the Furlough Scheme has been announced. There will be the requirement for businesses to start paying towards the scheme as in previous reiterations of the scheme, which can be seen in the table below of the amounts required to be paid and when.
|Government contribution: wages for hours not worked||80% up to £2,500||80% up to £2,500||70% up to £2,187.50||60% up to £1,875||60% up to £1,875|
|Employer contribution: employer National Insurance contributions and pension contributions||Yes||Yes||Yes||Yes||Yes|
|Employer contribution wages for hours not worked||No||No||10% up to £312.50||20% up to £625||20% up to £625|
|For hours not worked employee receives||80% up to £2,500||80% up to £2,500||80% up to £2,500||80% up to £2,500||80% up to £2,500|
Other key announcements include:
Extension to VAT cuts
An Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
Extension of apprenticeship hiring incentive
Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
£7 million to go to apprenticeship programme
£7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.
£126 million to go to traineeships and placements
Additional £126 million for 40,000 more traineeships in England, funding high quality work placements and training for 16-24 year olds in 2021/22 academic year.
Contactless payment increase
More than doubling the legal limit for single contactless payments, from £45 to £100
Businesses will continue to reclaim 2 week SSP
Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
Increase to Corporation Tax
To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
Cuts to company taxes when they invest new equipment
Beginning April 2021, the new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment. This is worth around £25 billion to UK companies over the two-year period the super-deduction will be in full effect.
As further detailed guidance is released on each of the applicable points, we shall share these with you. If in doubt, please contact your lead consultant, who is already working with you. No need to be alone through these challenging times, call our office now for HR or H&S support and advice.
Never alone and Stronger together with Park City.