The government and the chancellor, Rishi Sunak focused on restarting the economy after the pandemic but now that the dust has settled what does the Spring Budget mean for small businesses?
Self Employed Income Support Scheme (SEISS)
The fourth SEISS grant has been confirmed, this would cover the period from February to April 2021 and like previous grants it will be capped at £7500 for a three month period. HMRC will assess previous applicants and if you are eligible they will be in touch in mid-April, with Online claims available from Late April until the 31st of May. More detail of the fourth grant can be found on HMRC's policy paper Self-Employment Income Support Scheme Fourth Grant
The chancellor also announced that some qualifying businesses will be to claim a fifth grant which will cover May to September2021 and this will be available to claim from late July. The amount of grant will be linked to the drop in turnover seen by businesses between April 2020 and April 2021, if turnover fell by 30% or more they will be able to claim 80% of three months worth of their usual average profits to a maximum of £7500. If the fall in turnover is less than 30% then the claim will be for 30% capped at £2850 .
The fourth and fifth SEISS grants will also be opened up to include new businesses who were too new to be able to claim the previous grants.
Coronavirus Job Retention Scheme (CJRS) Extended
The CJRS or furlough scheme will be extended until the end of September 2021. Employees will be entitled to receive 80% of their wage for any hours they don't work, this will be fully funded by the government until July at which point the employer will have to contribute 10% and the government will fund the remaining 70%.
The employers contribution increases in August and September to 20% with the remaining 60% coming from the government. The employer will remain liable for the employers National Insurance and pension contributions for the rest of the scheme.
National Minimum Wage
There is no denying the hospitality industry has been hit hard by the pandemic and Rishi Sunak has therefore decided to extend the reduced rate of VAT at 5% until the 30th of September. From October the 1st 2021 until the end of the tax year (April 2022) there will be an interim rate of 12.5% before returning to the standard rate.
Other significant tax changes include:-
The VAT registration threshold will remain at £ 85,000. until April 2024
Personal allowance will remain the same from April 2022 to April 2024
Corporation tax for company profits in excess of £250,000 will rise to 25%