The Chancellor has announced measures to support the economy as businesses prepare to reopen. On first reading, it’s a comprehensive set of measures, delivered with the message that the government must do everything possible to secure the futures of businesses and citizens. Over the following weeks, as further details on how to access the support are made available, we will update our COVID recovery Pages.
But for now, here is a summary:
Business rates relief
The government will continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, 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.
Temporary reduced rate of 5% VAT
The government will extend the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30 September 2021. To help businesses manage the transition back to the standard 20% rate, a 12.5% rate will apply for the subsequent six months until 31 March 2022.
Coronavirus Job Retention Scheme
The government is extending the Coronavirus Job Retention Scheme for a further five months from May until the end of September 2021. Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond National Insurance contributions (NICs) and pensions required in April, May and June. From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September, as the economy reopens.
The government will provide ‘Restart Grants’ in England giving businesses the cash certainty they need to plan ahead and safely relaunch trading over the coming months:
- Up to £6,000 per premises for non-essential retail businesses
- Up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses,
The government is also providing all local authorities in England with an additional £425 million of discretionary business grant funding, on top of the £1.6 billion already allocated. Altogether, this support will cost £5 billion.
Self Employment Income Support Scheme
To support the self-employed across the UK through the next stage of the pandemic, the government confirms that the fourth Self Employment Income Support Scheme grant will be worth 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500 in total.
The grant will cover the period February to April, and can be claimed from late April. Self-employed individuals must have filed a 2019- 20 Self Assessment tax return to be eligible for the fourth grant.
The government announces that there will be a fifth and final SEISS grant covering May to September. The value of the grant will be determined by a turnover test, to ensure that support is targeted at those who need it the most as the economy reopens. People whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. The final grant can be claimed from late July.
Culture Recovery Fund
The government will provide £300 million to extend the Culture Recovery Fund to continue to support key national and local cultural organisations in England as the sector recovers.
Self Employed Income Support Scheme
Those whose turnover has fallen by 30% or more will continue to receive an 80% grant, while those whose turnover has fallen by less than 30% will therefore have less need of taxpayer support and will receive a 30% grant. The 4th grant will cover February to April, worth 80% of average trading profits up to £7,500. A 5th grant will be available from July.
Recovery Loan Scheme
From 6 April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.
Culture Recovery Fund
The government will provide a further £300 million to extend the Culture Recovery Fund.
National Museums and Cultural Bodies
The government will provide £90 million for continued support for government-sponsored National Museums and cultural bodies in England.