Financial Support for Businesses
The Chancellor has used his Budget 2021 to set out a ‘path to recovery’ after the coronavirus pandemic.
The Budget sets out a three-point plan to ‘protect jobs and strengthen public finances’. Key points include:
- The new National Infrastructure Bank will provide investment worth at least £40 billion into public and private sector projects
- Companies investing in new plant and machinery assets over the next two years will be able to claim 130% super-deduction capital allowance, and the Ministry of Housing, Communities and Local Government (MHCLG) has been allocated £10 million to launch a Modern Methods of Construction (MMC) taskforce
- The incentive payment for hiring a new apprentice increased to £3,000 and has been extended until September 2021, alongside the introduction of a more flexible way of employing apprentices
- There will be new funding for SMEs to develop their digital and management capabilities through a ‘Help to Grow‘ training programme, which will include a 50% discount worth up to £5,000 on certain types of digital software
- Construction will no longer benefit from the rebate on red diesel from April 2022
- The Job Retention Scheme will be extended until the end of September 2021
- The Self Employment Income Support Scheme will be expanded to include those who filed a tax return in 2019-20 and will continue with a fourth and fifth grant
- A new Recovery Loan Scheme will be launched on 6 April 2021, replacing the existing loan schemes when they close on 31 March 2021. The new scheme will offer Government-guaranteed loans of up to £10 million per business
- Corporation tax will be increased from 19% to 25% from April 2023 for businesses whose profits are greater than £250,000
- The stamp duty holiday will be extended until 30 June 2021
- The minimum wage will increase to £8.91 an hour from 1 April 2021.
There are a number of grants, loans, and deferral options that the government has launched that are there to support business through the pandemic.
Business Support Finder – Use this tool to see what financial support may be available to your business.
Bounce Back Loan Scheme – This scheme provides upto £50,000 worth of finance. The scheme has been extended until 31 March 2021.
Coronavirus Business Interruption Loan Scheme – If you have a turnover of under £45m, you may be able to apply for loans of up to £5m. The scheme has been extended until 31 March 2021.
Coronavirus Large Business Interruption Loan Scheme – Companies with a turnover of more than £45m may be able to apply for loans of up to £500m. This Scheme has been extended until 31 March 2021.
Corporate Financing Facility – This scheme will support your company if it’s been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities, by the Bank of England buying up your short-term debt.
Corporate Insolvency and Governance Bill – This Bill introduces new corporate restructuring tools to the insolvency and restructuring regime to give companies the breathing space and tools required to maximise their chance of survival
HMRC Late Payment Support – HMRC are helping companies that are struggling to pay their tax bills.
Job Retention Scheme – Provides government wage support to help keep your employees while work is reduced due to the pandemic. Ensure that you are up-to-date with your historic claims. This scheme has been extended until 30 April 2021.
Self Employment Income Support Scheme – For any labour only sub-contractors you have that are unable to work, they can claim funds through this scheme due to their ineligibility to the Job Retention Scheme.
Statutory Sick Pay Rebate Scheme – to claim back your liabilities under SSP payments during the pandemic.
Trade Credit Reinsurance Scheme – The Trade Credit Reinsurance Scheme ensures that trade credit insurance coverage and credit limits are maintained during the coronavirus pandemic, helping businesses to trade with confidence.
VAT Deferral – Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022. This scheme will be opt-in, and will open shortly in 2021.
Despite our campaigning efforts over the past month, Reverse VAT legislation came into force on 1 March. We would like to thank members who supported the #StopReverseVAT campaign, which reached over 2 million social media users during February and stands as a great example of the industry coming together in support of a common goal.
Now that the legislation has been introduced, we urge members to read Build UK’s practical guide to ensure that you understand how Reverse VAT will affect your business. You can also refer to Build UK’s checklist to ensure you have taken the necessary actions, including updating your invoices with the required information.
HMRC has confirmed it will ‘apply a light touch’ in dealing with any errors over the next six months, provided that companies can demonstrate they have tried to comply and acted in good faith.
One way of relieving pressure on cash flow as Reverse VAT comes into force is for companies that deferred their VAT payments between 20 March and 30 June 2020 to opt-in to the VAT deferral payment scheme. Companies which deferred VAT either need to make payment in full by 31 March 2021 or opt into the new scheme when it goes live from 1 March 2021. This will allow them to repay the VAT owed in up to 11 interest‐free monthly instalments until March 2022.