How the Budget impacts businesses in the North East

Read more at gov.uk

Coronavirus Job Retention Scheme

The government’s furlough scheme has been extended until the end of September 2021. Businesses can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.

Employers will be expected to pay 10% towards the hours their staff do not work in July, increasing to 20% in August and September, as the economy reopens.
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Self-Employment Income Support Scheme

A fourth grant will be available for self-employed workers from April (covering Feb-April), with those eligible able to claim 80% of three months’ average trading profits up to £7,500. A fifth grant will cover the period from May-onwards.

600,000 people, many of whom became self-employed in 2019-20, may now be able to claim direct cash grants.
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Business rate holiday in retail, hospitality and leisure sectors

The business rates holiday in England has been extended by three months. 750,000 retail, hospitality and leisure businesses will pay no business rates for three months from 1 April when combined with Small Business Rates Relief. Rates will then be discounted until end of the year.

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Reduced rate of VAT for hospitality and tourism sector

To protect hospitality and tourism jobs, the 5% reduced rate of VAT will be extended for six months to 30th September. An interim rate of 12.5% will remain in place for another six months.

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Restart grants for High Street shops and hospitality firms

Shops, restaurants, hotels, hair salons, gyms and other businesses, will be eligible for a restart grants – worth as much as £18,000 per firm – to help them reopen as lockdown eases.

Non-essential retail businesses will receive grants of up to £6,000. Hospitality and leisure businesses – incuding personal care and gyms – will be eligible or grants of up to £18,000.

It will be distributed directly to firms by local authorities from April and replace the current monthly grant system.

Find out more by visiting your local authority’s website.

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Traineeships and Apprenticeships

Government has announced a £126m investment to triple the number of traineeships.
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New ‘flexi-job’ apprenticeships will enable apprentices to work with a number of different employers in one sector. The cash incentive for employers who take on an apprentice – regardless of their age – will increase to £3,000.
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Financial support for arts, culture and sport organisations

Theatres, museums, heritage sites, festivals, music venues and other cultural/sports organisations will receive an additional £300m via the Culture Recovery Fund.
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Recovery Loan Scheme for businesses

Replacing the Bounce Back Loan and CBIL schemes, businesses of any size can apply for a Recovery Loan from £25,000 to £10m through to the end of the year. Government will provide lenders with an 80% guarantee.
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Personal tax thresholds

Income tax, national insurance and VAT rates will not be increased.

Next year, the personal allowance threshold will increase to £12,570 and remain in place until 2026.

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Corporation tax

In 2023 the rate of corporation tax paid on company profits will increase to 25% for some businesses. Those businesses with profits of £50,000 or less will see their corporation tax remain at 19%. A taper above £50,000 will mean businesses only start paying the full rate on profits from £250,000.

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The Super Deduction

For the next two years, government is allowing businesses to claim 130% of new machinery costs as a tax cut.
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Help to Grow

Two new schemes, Help to Grow Management and Help to Grow Digital, will provide additional support to SMEs

Help to Grow Management will offer new MBA style management training with businesses required to pay just £750, 10% of the unit cost.

Help to Grow Digital will help small businesses develop digital skills by giving them free advice and a 50% contribution towards the purchase of new productivity enhancing software, up to £5,000.
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Future Fund: Breakthrough

Companies with high R&D-intensity that are aiming to raise at least £20m of funding will be eligible to apply for government investment under Future Fund: Breakthrough.