Spring budget – how it affects your business
3rd March 2021
Today’s positive Spring Budget – what does it mean for your business?
Our Masterlord headlines following Chancellor of the Exchequer Rishi Sunak’s Spring Budget today – and how it could affect you. Apart from the expected furlough extension and changes to income and corporation tax, there’s news of an ambitious ‘Help to Grow’ initiative for small businesses – plus new Freeport status for Felixstowe and Harwich.
- The chancellor announced an ambitious new £520 million ‘Help to Grow’ initiative, aimed at helping small and medium-sized enterprises (SMEs) recover and build back better by adopting digital technology and management training to increase innovation, productivity, and future growth. The initiative contains two schemes. Help to Grow: Digital – this scheme will provide SMEs with discounted software and expert advice on how to best utilise it. Help to Grow: Management – this scheme will offer MBA-style management training to SMEs with the aim of increasing innovation and boosting growth. This will include projects to support people get management training and train small business in digital skills.
- New freeports at Felixstowe and Harwich will make it easier and cheaper to do business, as well as creating jobs. The eight others selected to be freeports are: East Midlands Airport, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside.
- The furlough support scheme (Job Retention Scheme), paying up to 80% of employees’ wages, is extended to the end of September. After July, employers will contribute 10%, rising to 20% in August and September. The Universal Credit uplift of £20 a week will also continue until the end of September.
- The income tax threshold for those paying the basic rate will rise to £12,570 next year. For higher-rate payers, the threshold will be £50,270. Both rates will stay the same until 2026.
- The VAT registration threshold will remain at £85,000 until 2024.
- Corporation tax will rise to 25% in 2023, still the lowest corporation tax in the G7. A new Small Profits Rate ensures that only businesses with profits of over £250,000 will be taxed at the 25% rate.
- Good news is that planned fuel and alcohol duties have been cancelled! Also, the chancellor announced the up-to-£500,000 “nil-rate band” for stamp duty will finish at the end of June, not the end of March as planned. First-time buyers will get a “government guarantee” on mortgages, with a deposit of 5%. It all helps!
Don’t forget that, if your Masterlord office is your only business premises, you receive 100% rate relief providing it is not over 1200 sq ft. However, if you take another office, you will then have to pay full rates on both offices. For information, contact Ipswich Borough Council at business.rates@ipswich.gov.uk
Felixstowe Port set to become a freeport
The background:
Since March, 700,000 people have lost their jobs and the economy has seen its biggest fall in 200 years.
The Office for Budget Responsibility expects the economy to return to pre-pandemic levels by the middle of 2022, six months earlier than it predicted in November. But it also forecasts that over the next five years the economy will be 3% smaller than it would have been.
Forecasts show the UK government has borrowed £355bn this year, the chancellor said. Next year this is expected to be £234bn. Borrowing will fall in 2022/3, as a proportion of national income.
(Rishi Sunak Photo – Copyright PA News)
