BUDGET UPDATES FOR THOSE IN BUSINESS05 March 2021 | Steve Thirsk
Below is an overview of the kep points arising from the March 2021 Budget for those in business...
> There will be a fourth and fifth Self-Employment Income Support Scheme (SEISS) grant and its scope has been widened to include 600,000 people who were previously excluded because 2019/20 tax returns can now be considered.
The next grant is for February, March and April, will be worth 80% of trading profits for three months, capped at £7,500 and applications for this fourth grant will open in late April (until 31 May). To apply, you must earn at least 50% of your total income from self-employment, and your business must have had a new or continuing impact from coronavirus which you believe WILL cause a "significant reduction" in trading profits - either because of "reduced demand, activity or capacity" OR because you are temporarily unable to trade. Also, your average trading profits must be no more than £50,000 a year. HMRC have yet to specify the trading years that apply for this fourth grant. We will update you when we know. Don’t forget that you don't need to have applied for an earlier grant to apply for this one, and you can apply despite still working as long as your business has been impacted, as above!
The fifth and final self-employed grant will be available to apply for from late July. Full details, including the exact eligibility criteria, have yet to be revealed. It was, however announced that it will be worth three months of average profits, though it will cover five months (May to September). We also know that this grant will be subject to a turnover test – If your turnover has fallen by 30% or more, you will be able to claim 80% of your three months’ average trading profits (capped at £7,500). If your turnover has fallen by less than 30%, you can claim 30% of your three months' average trading profits (capped at £2,850).
> There is a new Recovery Loan Scheme The scheme launches on 6 April and is open until 31 December (subject to review), with the loans being made available through a network of accredited lenders (yet to be named). The government will guarantee 80% of the finance to the lender, and the finance can be used for any legitimate business purpose. The loans start at £25,001, and the finance terms will be for up to 6 years, with no personal guarantees taken on facilities up to £250,000. Invoice finance and asset finance will also be available starting at £1,000, with terms of up to 3 years.
UK trading businesses can apply that show they are viable or would be viable were it not for the pandemic, and been impacted by the coronavirus pandemic, but are not in insolvency proceedings. Also, businesses that have had loans from the existing State schemes are still eligible to apply if they meet the eligibility criteria.
> A 'Super-deduction' tax break is being launched where companies can claim 130% of investments against tax. This is available to limited companies but not sole traders or partnerships. If a Company Director, and you invest in new equipment you will get a 130% allowance towards your taxable income!
> A new Restart Grant will launch in April to help businesses. These will replace the monthly Local Restrictions Support Grants, which expire at the end of March. They will be available in England only and will be worth up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care, and gym businesses. They will be administered by local authorities and subject to criteria similar to the previous grants. The local authorities will also get an extra £425 million to distribute to businesses not eligible for these grants, but still suffering because of the restrictions.
> The Business Rates Holiday has been extended to 30 June 2021
> The Carry Back of Trading losses has been extended to 3 years instead of the current 1 year
> New Digital Training and Software opportunities. It was announced that the Government is going to help small businesses across the UK by giving them free expert digital skills related training as well as a 50% discount on new productivity-enhancing software worth up to £5,000 pounds each.
> The flexible furlough scheme, officially known as the Coronavirus Job Retention Scheme, will continue until the end of September. Employees on furlough will continue to get 80% of their usual wages for any hours not worked, up to £2,500 a month, but from July employers will be asked to contribute more towards this. Until 30 June, the State will pay the full 80% of the furlough amount. In July the State will pay 70% of it, and employers 10%, then in August and September the State will pay 60% and employers will have to pay 20%. In all cases employers will cover any national insurance and employer pension contributions.
> The universal credit uplift of £20 per week will continue for a further six months. Plus working tax credit claimants will get equivalent support for a further six months.
The knowledgeable Paul Simpson from the amazing Shuttertax has put together an in depth blog all about this, going in to detail about how each aspect can effect photographers. READ IT HERE - IT'S A MUST READ!
Shuttertax are a very knowledgeable and friendly husband and wife team, there for all of your Tax and VAT needs...and they truly understand the needs of photography businesses, having photographed weddings for 15 years before launching Shuttertax. Find out more about them HERE
Legal & Business Support
Legal protection, Tax Investigation cover, contract dispute cover, debt recovery and much more
Join the Guild
A great network, top support, mentoring, legal & tax protection, great discounts and much more. Why not join us?!