Rishi Sunak announced a £65 billion support package for businesses in the 2021 Budget but as debt continues to grow some tax increases were inevitable.
The government has borrowed £355 billion this year alone – the highest level of borrowing since World War Two.
It plans to repay some of the debt with a freeze on income tax thresholds and a corporation tax increase.
Businesses with profits of less than £50,000 will continue to pay the 19% corporation tax rate. However, those with profits of more than £50,000 will see an increase. The full 25% rate will only apply to businesses with profits of £250,000 or more.
We have supported businesses throughout the pandemic with corporation tax funding and as an accredited provider of the Coronavirus Business Interruption Loan Scheme (CBILS).
A new Recovery Loans Scheme will replace The CBILS and Bounce Back Loans for businesses.
Speaking at the Budget, Sunak said: “Even with the new Restart Grants, some businesses will also need loans to see them through. As the Bounce Back Loans and Business Interruption Loan schemes come to an end, we’re introducing a new Recovery Loans Scheme to take their place.”
We will continue to help businesses with new loan applications and offer support and guidance through our free business consultations.
Key points in the Budget:
- Income tax thresholds will increase next year as planned followed by a freeze on thresholds until April 2026
- The government has extended the Furlough scheme until September. Self-employed or freelancers who missed out on initial support can now claim up to £2,500 per month for the tax year 2019-20
- The business rate holiday will continue until June
- The reduced rate of VAT of 5% for the hospitality and tourism sectors will continue until the end of September. After September it will increase to 12.5% with a further increase to 20% in April 2022
- Incentive payments for companies taking on new apprentices will double to £3,000
- Fuel duty will not increase for the 11th consecutive year
- A new Restart Grant scheme worth £5 billion will provide grants for businesses
- A new mortgage guarantee scheme will enable homebuyers to buy homes up to £600,000 with a 5% deposit on mortgages
V4B Business Finance
V4B Business Finance has continued to provide vital business funding during lockdown and throughout the pandemic. We arrange traditional funding, unsecured loans, and asset finance. Decisions on finance can be made in as little as 24 hours.
For a FREE business funding consultation contact:
Call 01978 668939