The Chancellor of the Exchequer gave the Government’s 2021 budget statement on Wednesday 3rd March.

The budget statement contained many new business support schemes and measures, and extended or made changes to existing ones. The Growth Hub has therefore created this “at a glance” article to help you understand what the 2021 budget statement means for your business. Where the measure is a new one, it has been indicated as “(NEW)”.

If you wish to learn more about the business support announced in the 2021 budget, or if you would like help and advice about any aspect of your business generally, then please get in touch with your local Growth Hub business advisor team, whose details can be found here.

For reference, the full budget announcement can be found on the gov.uk site here.

Support for Covid-19 Survival

These are immediate support measures to help businesses survive the anticipated final 6 months of the Covid-19 pandemic through to September 2021

Coronavirus Job Retention Scheme (“Furlough Scheme”)

• Has been extended from end of April to end of September 2021
• Will continue to cover 80% of employee wages for hours not worked, until scheme ends
• Tapering of scheme will see employers contribute 10% of salary in July and 20% of salary in August and September (of hours not worked) as the economy reopens

Self-Employment Income Support Scheme Grant

• Has been extended to include a fourth grant payment covering the period February to April 2021, and a fifth and final grant covering the period May to September 2021
• Will continue to offer a grant set at 80% of three months’ average trading profits, paid in a single instalment up to a maximum of £7,500
• The grant will apply to anyone self-employed (sole traders and business partnerships) that submitted a self-assessment tax return with HMRC for 2019-20
• The fourth grant can be claimed from late April, and the fifth grant can be claimed from late July

Local/Additional Restrictions Grants

• An additional £425 million of discretionary grant funding for local authorities to distribute
• It is anticipated that these will be deployed in a similar way to the pre-existing Local Restrictions Grants (LRSG) and Additional Restrictions Grants (ARSG)
• Further details TBC – check your local-authority’s website in due course for more information

Apprentice Recruitment Grant

• Employers who hire a new apprentice between 1 April & 30 September 2021 will receive £3,000 per new hire, compared with £1,500 per new apprentice hire under the previous scheme

Business Rate Holiday & Relief

• Retail, leisure & hospitality businesses will pay no business rates for first three months of the 2021/22 financial year (April to June)
• After the rate-free three months, rates will be discounted by two-thirds (66%) for remaining nine months of financial year (July to March)
• This relief is subject to a cap of £105,000 per business for all of their eligible properties

VAT Relief

• The 5% reduced rate of VAT will be extended until the end of September for the tourism & hospitality sector
• A tapered increase to 12.5% will apply for the second half of the financial year (October to March)
• VAT rates will return to normal from 1st April 2022

VAT Deferral New Payment Scheme

• Any business that took advantage of the original VAT deferral scheme can now opt to use the VAT Deferral “New Payment Scheme” to pay that deferred VAT in up to eleven equal payments from March 2021, rather than one larger payment due by 31 March 2021

Extended Loss Carry Back for businesses (NEW)

• The “trading loss carry-back” rule will be temporarily extended from the existing one year to three years
• This will be available for both incorporated and unincorporated businesses

Statutory Sick Pay (SSP) Rebate

• Extended into 2021-22 financial year
• Small and medium-sized employers across the UK will continue to be able to reclaim up to two weeks of eligible SSP costs per employee. 
• This scheme is a temporary COVID-19 measure intended to support employers; the government will set out steps for closing this scheme in due course

Support for Covid-19 Recovery

These are longer-term support measures to help businesses recover and grow after the anticipated final 6 months of the Covid-19 pandemic beyond September 2021

Restart Grants (NEW)

• The government will provide ‘Restart Grants’ giving businesses the cash-certainty they need to plan ahead and safely relaunch trading over the coming months
• A grant of up to £6,000 per commercial premises for non-essential retail businesses
• A grant of up to £18,000 per commercial premises for hospitality, accommodation, leisure, personal care and gym businesses
• Launch date and application process TBC

Recovery Loan Scheme (NEW)

• 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
• Further details and application process TBC

Help to Grow: Management (NEW)

• The government will offer a new UK-wide management programme to upskill 30,000 SMEs in the UK over three years
• Developed in partnership with industry, the programme will combine a national curriculum delivered through business schools with practical case studies and mentoring from experienced business professionals
• Over 12 weeks, and 90% subsidised by government, this programme will equip SMEs with the tools to grow their businesses and thrive
• Further details and application process TBC

Help to Grow: Digital (NEW)

• The government will launch a new UK-wide scheme in the autumn to help 100,000 SMEs save time and money by adopting productivity-enhancing software, transforming the way they do business
• This will combine a voucher covering up to half of the costs of approved software up to a maximum of £5,000, and free impartial advice, delivered through an online platform
• Further details and application process TBC

Support for “Portable Apprenticeships” (NEW)

• The government will introduce a new £7 million fund from July 2021 to help employers in England set up and expand portable apprenticeships
• This will enable people who need to work across multiple projects with different employers to benefit from the high quality long-term training that an apprenticeship provides
• Further details and application process TBC

Super-Deduction (Capital Allowances) Tax Incentive (NEW)

• From 1 April 2021 until 31 March 2023, companies investing in qualifying plant and machinery will benefit from a 130% first-year capital allowance
• This upfront super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest

Other Support Measures & Schemes

These are other, non-Covid related announcements that will be of interest to businesses in the medium to long term

Freeports (NEW)

• 8 new Freeport locations announced, included the Humber region. They will being operating from late 2021.
• Freeports are “special economic zones” with different regulations and rules to make it easier to attract investment and to operate a business
• Freeports will contain areas where businesses will benefit from more generous tax reliefs, customs benefits and wider government support
• Details on the Humber’s Freeport bid can be found here

UK Infrastructure Bank (NEW)

• Will provide financing support to private sector and local authority infrastructure projects that help meet government objectives on climate change and regional economic growth
• This will consist of a £12 billion fund of equity and debt capital
• The institution will begin operating in an interim form later in spring 2021

Future Fund: Breakthrough (NEW)

• Building on the government’s Future Fund, the government will commit £375 million to introduce Future Fund: Breakthrough, a new direct co-investment product to support the scale up of the most innovative, R&D-intensive businesses
• The British Business Bank will take equity in funding rounds of over £20 million led by private investors to ensure these companies can access the capital they need to grow and bring prosperity to communities across the UK.

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