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Martin Johnson, Partner at Torgersens Chartered Accountants gives an overview of yesterday’s budget announcements with a focus on those affecting small- and medium-sized business owners.

Financial support

Many will heave a sigh of relief that the CJRS (furlough) scheme has been extended once again, this time until the end of September 2021. Employers will be asked to make a 10% contribution from July then 20% in August and September. In his speech the chancellor recognised that 700,00 people have lost their jobs and that the economy has shrunk by 10% - unprecedented in the last 300 years. 

As mentioned in our blog earlier this week, restart grants of between £6,000 and £18,000 will be made available for businesses when they reopen. These will be distributed through Local Authorities.

Additional SEISS grants

Fourth and fifth grants will be made available under the Self-Employment Income Support Scheme. The fourth will be from February to April and the fifth from May to September 2021, providing three months’ support at 80% of trading profits.

Recovery Loan scheme

To start as the Bounce Back Loan and the CBIL schemes come to an end, the Recovery Loan Scheme will be open to any businesses of any size. Applications can be made for loans from £25,000 up to £10 million, through to the end of this year. The government will provide a guarantee to lenders of 80%.

Business rate holiday extension

The business rates holiday has been extended until end of June. Then, from 1 July, rates for eligible businesses will be reduced by 66% until the end of March 2022.

Corporation Tax increase

Companies with profits over £250,000 will see an increase in Corporation Tax from 19% to 25%, taking effect from April 2023. Businesses with profits under £50,000 will have a small profits rate at 19%, with a taper for business with profits between £50,000 and £250,000.

Value Added Tax

Though the headline VAT rate is unchanged at 20%, the lower rate of 5% for the hospitality and tourism sector will remain until 30 September when it will rise to 12.5% until April 2022 before reverting to 20% thereafter.

Super deduction – investment in new equipment

For two years starting in April 2021, a ‘super-deduction’ will allow companies to reduce taxable profits by 130% of the cost of any investment they make in new equipment. The chancellor said that according to the OBR, this will boost business investment by 10%; around £20 billion more per year.

Apprentice hiring incentive

The incentive payment for businesses to take on apprentices has doubled to £3,000.

With relevance directly to our region, the speech mentioned that government will be funding new port infrastructure ‘to build the next generation of offshore wind projects in Teesside and Humberside.’

The full budget speech can be read here

Further support

Please get in touch if we can help you understand the implications of any of the budget announcements for you or your business:

By phone: 0191 567 8611

By email: enquiries@torgersens.com

Or email me, Martin Johnson at martin.johnson@torgersens.com.

About the Author

Martin Johnson Image

Martin Johnson

With expertise in advising family-owned companies on a range of tax, accountancy and business issues, Martin also has an in-depth knowledge of the automotive and property sectors. In addition, he provides advice on inheritance tax planning and wealth management to owner-managed businesses.  Martin leads the firm in developing its expertise in the buy-to-let sector, advising both residential and commercial property owners on relevant tax and legislation issues.   A further element to Martin’s role is to build Torgersens’ relationships with banks, financial advisors and specialists in commercial and employment law to ensure that the firm’s clients have access to market-leading guidance.  

To get in touch please e-mail martin.johnson@torgersens.com.

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