The chancellor, Rishi Sunak, has delivered the 2021 Budget which was, as expected, was not full of joy for small businesses.
Some of the main points
- Furlough to be extended until the end of September
- Government to continue paying 80% of employees’ wages for hours they cannot work
- Employers to be asked to contribute 10% in July and 20% in August and September
- Support for the self-employed also to be extended until September
- 600,000 more self-employed people will be eligible for help as access to grants is widened
- Minimum wage to increase to £8.91 an hour from April
Taxation
- No changes to rates of income tax, national insurance or VAT
- Personal income tax allowance to be frozen at £12,570 from April 2022 to 2026
- Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
- Corporation tax on company profits to rise from 19% to 25% in April 2023
- Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
The arts and sport
- £400m to help arts venues in England, including museums and galleries, re-open
- £300m recovery package for professional sport and £25m for grassroots football
Business, digital and science
- Tax breaks for firms to “unlock” £20bn worth of business investment
- Firms will be able “deduct” investment costs from tax bills, reducing taxable profits by 130%
- Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships
- VAT rate for hospitality firms to be maintained at reduced 5% rate until September
- Interim 12.5% rate to apply for the following six months
- Business rates holiday for firms in England to continue until June with 75% discount after that
- £5bn in re-opening grants for non-essential businesses initially worth up to £6,000 per premises
- New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas
- Business rates holiday extended to June
- Contactless payment limit will rise to £100