The COVID-19 Support measures announced in Budget 2021
Covid-19 Support measures were as expected, one of the key topics in the Budget on 3 March 2021. As predicted, the Chancellor confirmed extensions to many existing measures, including the Furlough Scheme, alongside new support measures, which includes Restart Grants and a recovery Loan Scheme, to replace previous business loan schemes.
Below we outline the main measures which were announced:
Recovery Loan Scheme
The Recovery Loan Scheme, which was confirmed in the budget is aimed at replacing those similar government-backed loan schemes coming to an end. Available from 6 April 2021, it will provide lenders with an 80% guarantee on eligible loans between £25,000 and £10 million. It will be open to all businesses, including those who have already taken advantage of COVID-19 guaranteed loan schemes.
Restart Grants up to £6,000 per premises for non-essential retail businesses will be able in the form of Restart Grants. For hospitality, accommodation, leisure, personal care and gym businesses, up to £18,000 will be available.
Extension to the Self-employment Income Support Scheme (SEISS)
The Budget confirmed details of the previously announced fourth grant alongside a fifth and final grant.
Importantly, this scheme has now been extended to include those who have filed a Self Assessment tax return for 2019/20 (but only if this has been filed before 3 March 2021). Those who from 6 April 2019 are self-employed now qualify for this scheme, subject to other conditions. Previously to apply, you had to have submitted a tax return by March 2020 to qualify for the support.
The fourth grant covers the period February to April 2021 and the grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. Further details are available here.
The fifth grant is means-tested with sole traders whose business turnover has dropped by more than 30% receiving the full 80% grant (capped at £7,500) whereas businesses whose turnover has not dropped by more than 30% will only be entitled to a grant of 30% (capped at £2,850).
The Fifth grant can be claimed from late July 2021 and will cover the period May to September 2021. Further details regarding the fifth grant will be provided in due course.
Business Rates relief that currently exists for eligible retail, hospitality and leisure properties in England is to be extended until 30 June 2021. This offers 100% relief.
66% Business Rates relief will be provided to these sectors for the period from 1 July 2021 to 31 March 2022. This will be capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.
Extension to the VAT rate reduction for the hospitality sector
The temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation and admissions to certain attractions will now continue until 30 September 2021. Additionally, a 12.5% rate will then apply for the subsequent six months until 31 March 2022, to help businesses manage the transition back to the standard 20% rate.
Further extension of the CJRS
The Coronavirus Job Retention Scheme (CJRS) scheme has been further extended until 30 September 2021.
The level of grant available to employers under the scheme will remain the same until 30 June 2021. From 1 July 2021, employers will be asked to contribute towards the cost of furloughed employees’ wages. To be eligible, employers are required to continue to pay furloughed employees 80% of their wages, up to a cap of £2,500 per month (for the time they spend on furlough).
The reduction in the amount of the grant means that the percentage of furloughed wages that employees can recover will be:
- For July 2021 – 70% of furloughed wages (up to a maximum of £2187.50)
- For August and September 2021 – 60% of furloughed wages (up to a maximum of £1,875.00)
Essentially, employers will now be expected to pay 10% towards their employees’ unworked hours in July, increasing to 20% in August and September.
Employer NICs and mandatory minimum automatic enrolment pension contributions will still need to be funded by employers.
Additional payments for employers who hire new apprentices
The Government will extend and increase the payments made to employers in England who hire new apprentices will be increased.
For those employers hiring a new apprentice between 1 April 2021 and 30 September 2021, £3,000 will be received for each new hire (or £2,000 for those aged 24 and under) this is an increase of 50%. This is in addition to the existing £1,000 payment that is provided by the government for all new apprentices between the ages of 16 and 18 and those aged under 25 that have an Education, Health and Care Plan (where this applies).
Supporting apprenticeships across different employers
A £7 million fund will be introduced by the Government from July 2021, with the aim of helping employers in England set up and expand portable apprenticeships. This will enable apprentices who need to work across multiple projects with different employers to benefit from high quality, long-term training that an apprenticeship can provide.
Further information on COVID-19 support measures
The details for much of these schemes are still emerging and we will provide an update on our website when this has been received. In the meantime, further information on how the Government is providing COVID-19 support measures to businesses can be found on their website here.
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