Chancellor Rishi Sunak has confirmed an extension to the business rates holiday and furlough scheme, as well as new £6000’“restart’ grants for non-essential retailers, as part of his Budget announcement today.
Speaking to the House of Commons this afternoon, Sunak said the 100% business rates holiday would be extended until the end of June for hard-hit retailers and hospitality and leisure firms that operate premises on high streets, shopping centres and retail parks. Further he commented: “for the remaining nine months of the year, business rates will still be discounted by two thirds, up to a value of £2m for closed businesses, with a lower cap for those who have been able to stay open.”
On VAT, he also confirmed the 5% reduced rate of VAT will be extended for six months to 30 September followed by interim rate of 12.5% for another six months. The standard rate will not return until April next year.
The Chancellor said these measures equated to “a £6 billion tax cut for business”.
The business rates holiday – aimed at lifting the burden on retailers and other high street businesses that have been adversely impacted by the Covid-19 pandemic, especially the lockdowns – had originally been due to expire at the one year-mark in April.
Sunak also confirmed the furlough scheme would be extended until the end of September, and employees will continue to receive 80 per cent of their salary for hours not worked (although employers would be expected to contribute 10% in July and 20% in August).
He also set out a new Recovery Loan Scheme to replace previous Covid-19 loan packages, allowing businesses of any size to apply for loans from £25,000 up to £10 million until the end of the year, with the UK Government providing lenders with an 80 per cent guarantee. Sunak said retailers and other businesses would still need loans to see them through despite the restart grants.
Meanwhile, the corporation tax is set to rise from 19 per cent to 25 per cent in 2023. However, a new “small profits rate” will maintain the 19 per cent rate for businesses with profits of £50,000 or less – meaning around 70 per cent of companies – 1.4 million businesses, many of which are retailers – would be “completely unaffected” by the tax hike.
For self-employed workers will continue to receive grants worth three months of average profits, and that claims can be made from late July (covering period to end September).
Despite recent speculation about the so-called Amazon tax (on online sales) there was no mention made today during the Budget.
