2021 Spring Budget Summary – Covid Support

Furlough Scheme

The furlough scheme was due to close at the end of April 2021; however it has been extended until the end of September. Whilst employees will continue to receive 80% of their current salary for hours not worked, there will be employer contributions from July.

In July, HMRC will contribute 70% towards the employee’s wages and the employer will have to top these up by 10%.   In August and September, the HMRC contribution drops to 60%, and the employer contribution rises to 20%

Self Employed Grants

HMRC have confirmed that the 4th self-employed support grant will be available late April, date to be confirmed mid-April. It will be 80% of a 3 month average profit; and will include your 2020 tax return figures, so the amount may change from the previous grants received.The delay is to ensure the government can support newly self-employed folks access funding they have previously been excluded from. There will also be a fifth grant covering May to September, details of which we’ll post later.

HMRC guidance notes (external link – opens in new window).

5% VAT on food and hotels etc

The 5% reduced VAT rate charged on food, non alcoholic drinks, hotel accommodation,attractions etc, has been extended until 30th September 2021.   It will then rise to 12.5% until 31 March 2022 before going back up to the standard rate of 20% on 1st April 2022.

Restart Grants, Recovery Loans and Business Rates Reductions

Non-essential retail businesses will be able to claim for cash grants of up to £6,000 per premises, while hospitality, accommodation, leisure, personal care and gym businesses can claim up to £18,000 per premises given their later reopening date.   We will update you when the claim portal for this is open, but they may be done automatically like the previous ones.

With the bounceback loans and CBILS reaching their final application date of 31st March 2021, a new recovery loan scheme has been announced which should allow business to apply for loans or overdrafts from £25,000.   Further details still to be announced.

The 100% business rates holiday has been extended to 30th June 2021 for eligible retail, hospitality and leisure businesses.   They will also be discounted by 2/3rds for the remainder of the 2021-22 tax year.