Loading…
Spring Budget 2021_businesses
Read time: 6 minutes
Last updated: 3 Mar 2021
On this page

Spring Budget 2021: Steps to help business recovery

In addition to the government reserving £5 billion for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England – a range of other measures are being offered to support businesses.

These other measures include the launch of the recovery loan scheme, VAT reduction for the UK’s tourism and hospitality sector and business rates reliefs, along with additional measures regarding self-employment income support scheme grants.

Recovery loan scheme

In order to allow businesses to recover from the pandemic and grow, the recovery loan scheme will be introduced from 6 April 2021 until 31 December, which will allow businesses to access loans between £25,000 and £10 million once the existing Covid-19 loan scheme closes. The government guarantees 80% of the finance to the lender to give them confidence to lend to UK businesses. Loans will be available through a network of accredited lenders whose names will be made public in due course.

Extension of the reduced VAT rate

Specifically for the UK’s tourism and hospitality sector, the government will retain the temporary reduced rate of 5% VAT for good and services supplied until 30 September 2021 and then introduce  a new rate of 12.5% from 1 October 2021 to 31 March 2022 to help businesses manage the transition back to the standard 20% rate. Click here for more information.

Business rates holiday

The business rates holiday has been extended by an additional three months. Therefore, 750,000 retail, hospitality and leisure properties in England will pay no business rates from 1 April 2021 to 30 June 2021 when combined with the Small Business Rates Relief. 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.

Self-Employment Income Support Scheme

The Self-Employment Income Support Scheme (SEISS) will be extended to September 2021, with fourth and fifth grants being available.  The fourth grant will be on a similar basis to past grants, but the fifth will be determined by the individual’s loss of turnover.  Also, the SEISS will be available to self-employed individuals who have just filed their first tax return.

The government will legislate to ensure that grants from the Self-Employment Income Support Scheme (SEISS) made on or after 6 April 2021 are taxed in the year of receipt. The measure will be effective from the 2020/21 tax year onwards.

Additionally, a measure is being enacted which would enable HMRC to recover payments where an individual was entitled to the self-employment income support scheme grant at the time of claim but subsequently ceases to be entitled to all or part of the grant.

About the author

Federica Papa

+44 (0)207 556 1493
papaf@buzzacott.co.uk

These other measures include the launch of the recovery loan scheme, VAT reduction for the UK’s tourism and hospitality sector and business rates reliefs, along with additional measures regarding self-employment income support scheme grants.

Recovery loan scheme

In order to allow businesses to recover from the pandemic and grow, the recovery loan scheme will be introduced from 6 April 2021 until 31 December, which will allow businesses to access loans between £25,000 and £10 million once the existing Covid-19 loan scheme closes. The government guarantees 80% of the finance to the lender to give them confidence to lend to UK businesses. Loans will be available through a network of accredited lenders whose names will be made public in due course.

Extension of the reduced VAT rate

Specifically for the UK’s tourism and hospitality sector, the government will retain the temporary reduced rate of 5% VAT for good and services supplied until 30 September 2021 and then introduce  a new rate of 12.5% from 1 October 2021 to 31 March 2022 to help businesses manage the transition back to the standard 20% rate. Click here for more information.

Business rates holiday

The business rates holiday has been extended by an additional three months. Therefore, 750,000 retail, hospitality and leisure properties in England will pay no business rates from 1 April 2021 to 30 June 2021 when combined with the Small Business Rates Relief. 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.

Self-Employment Income Support Scheme

The Self-Employment Income Support Scheme (SEISS) will be extended to September 2021, with fourth and fifth grants being available.  The fourth grant will be on a similar basis to past grants, but the fifth will be determined by the individual’s loss of turnover.  Also, the SEISS will be available to self-employed individuals who have just filed their first tax return.

The government will legislate to ensure that grants from the Self-Employment Income Support Scheme (SEISS) made on or after 6 April 2021 are taxed in the year of receipt. The measure will be effective from the 2020/21 tax year onwards.

Additionally, a measure is being enacted which would enable HMRC to recover payments where an individual was entitled to the self-employment income support scheme grant at the time of claim but subsequently ceases to be entitled to all or part of the grant.

Have an enquiry about what the Budget means for you?

If you have any questions regarding accessing the restart grants, recovery loan scheme, the extension of reduced rate of VAT, the details of the business rates holiday or the changes to the self-employment income support scheme grants, please complete the form below and one of our experts will be in touch with you.

Please complete all required fields above.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

View other Budget content

Spring Budget 2021
Spring-Budget-Notforprofits
Spring Budget 2021_individuals
close back
Your search for "..."
did not yield any results.
... results for "..."
Search Tags