Has Rishi Sunak’s impossible balancing act delivered hope? March budget 20214th March 2021
Boris Johnson spoke of the crocus of hope poking its way through the frost and spring being round the corner when he launched the roadmap to end lockdown a couple of weeks ago, but has Rishi Sunak delivered hope for small businesses in his budget this week?
Work Avenue have been supporting many people who have lost their jobs or been trying hard to keep their businesses afloat during this pandemic. And so we all watched with anticipation to see how the Chancellor addressed the unprecedented challenges of the last year with regard to employment and business, but with an eye to the future as well.
He has, as we all recognise, a near impossible balancing act given the staggering deficit the country is facing but the plan to increase corporation tax to 25% in 2023 is a bitter pill to swallow for many small businesses, as it was these company directors that went without any support from the Government during the pandemic. Additionally, increasing taxes on profits could also impact those same businesses, who need to invest, create jobs and generate growth in order to claw back the opportunities missed during this pandemic – so risks choking growth at a crucial time.
It is also good to see that the Chancellor has provided two further tranches of support for those that are self-employed. Eligible self-employed workers who have lost income due to the virus will be able to claim 80% of earnings between February and April up to a cap of £2,500. The Chancellor also confirmed that a fifth and final grant will be available covering lost income for the following months with less generous support for those whose turnover has fallen by less than 30%.
The Chancellor has confirmed that both grants will be available for 600,000 newly self-employed workers as long as they submitted a tax return by midnight last night. These individuals were precluded from support at the start of the Self Employed Income Support Scheme when it began last year as they had not yet filed a tax return.
The businesses we support at Work Avenue tell us how valuable the SEISS has been in the last year. Many of our clients fell in between the cracks as they were newly established business. The news that they will now be able to benefit most welcome and will provide an essential steppingstone on their business journey.
A new recovery loan scheme has been announced to replace the current Covid-19 support programmes when they close for applications at the end of March. Chancellor Rishi Sunak unveiled the successor scheme which will provide loans between £25,000 and £10m to businesses, with 80 per cent of the loan’s value guaranteed by the government.
Businesses including retail, leisure and hospitality in England have been given another three months free of business rates. The tax holiday which was introduced last year was due to end this month and will now run until June. There will be a further six-month period where rates will be two-thirds of the normal charge, up to a maximum of £2m for closed businesses.
The Government is also introducing two new Help to Grow schemes for SMEs. Help to Grow Management and Help to Grow Digital which will offer 130,000 companies across the UK the opportunity to train and develop in the areas of management and digital skills.
So many of our businesses have had to pivot and provide services and products online in the last year. The Help to Grow Digital Scheme will provide valuable and much needed training as well as discounts on essential software, all of which represents robust and practical support to small businesses when they need it most.
The Furlough Scheme has been regarded as one of the Governmental support highlights of the pandemic, and the announcement from the Budget is that the scheme, which has been extended three times, will be extended until the end of September with no changes to employees who will still receive 80% for hours not worked. As businesses open they will be asked to contribute 10% in July and 20% in August and September. Emma May, Director of Employment and Operations at Work Avenue said: “The Furlough Scheme has been a lifeline to employers and employees alike, providing a cushion of support while trading has been such a challenge. Its conclusion will inevitably lead to a wave of redundancies and further financial instability for so many. At Work Avenue, we are always looking for creative and contemporary ways to help people into employment when the going gets tough, and we intend to rise to the challenge this year too.”
We sincerely hope that we are nearing the end of the pandemic and the restrictions that have been so stifling for everyone. Please be assured that Work Avenue is here to help and can provide one to one business or employment guidance as well as webinars and skills-based workshops. We would love to hear from you, whatever your employment or business circumstances, so do get in touch by emailing firstname.lastname@example.org