Budget Update : For Businesses

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Covid Recovery

  • The Furlough scheme is to be extended to end of September with the amount employer’s will be asked to contribute 10% in July and 20% in August and September as the scheme is gradually phased out.
  • New Restart Cash Grants will be made available for up to £6000 for non-essential businesses and other businesses such as personal care will be eligible for grants of up to £18,000
  • A new Recovery Loan scheme to replace CBIL / Bounce Back Loans will be available for loans of between £25,000 and £10 million

Hospitality and Leisure Sector

The hospitality sector will benefit from:

  • reduced VAT of 5% until the end of September. Then it will be gradually increased, at 12.5% for six months, before returning to the standard rate from April 2022.
  • Hospitality and leisure businesses will pay no business rates for three months, then rates will be discounted for the remaining nine months of the year by two-thirds.
  • All alcohol duties will remain frozen

Tax

  • Self-employment income support scheme has also been extended. The fourth grant will cover February to April, worth 80% of average trading profits up to £7,500.
  • Corporation tax will increase to 25% as of April 2023. This will be tapered so that businesses with profits of more than £250,000 will be taxed at the full 25% rate. Small companies with profits of less than £50,000 will still pay 19%.
  • A new “super-deduction” tax break for firms that invest. This will allow firms to reduce their tax bill by 130% of what they spend on investment.

Good news for the North East:

  • Teesside has been selected as one of the eight flagship Freeports that the Government is to establish – this will enable a simpler planning system and tax reliefs to be provided to businesses who set up in the Freeport trade area.
  • A new Treasury campus will be situated in Darlington, details about how many civil servants could be relocated to Darlington and how many jobs could be created in the region have not yet been clarified, but there are plans to move up to 22,000 civil servants out of London by 2030.

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