Chancellor Rishi Sunak has promised to extend many of the key coronavirus support schemes until later in the year to protect businesses as they emerge from lockdown.
The Spring Budget announcements on extensions to the furlough scheme, SEISS grants and the business rates holiday as well as new grants to help firms to re-open have been warmly welcomed by business groups.
Mike Cherry, national chairman of the Federation of Small Businesses (FSB), said that thousands of small firms would "welcome both the extension of flagship support schemes that have kept them going over the hardest year they have ever faced, as well as confirmation of new support measures around taxation, employment and cash grants".
Cherry also praised the extension of the grants to the newly self-employed but he added: "Company directors will be extremely disappointed to see that they have been left out in the cold yet again."
Adam Marshall, director general of the British Chambers of Commerce (BCC), said that "there's much to welcome in this Budget" for businesses across the UK. He said: "Extensions to furlough, business rates relief and VAT reductions give firms a fighting chance not only to restart, but also to rebuild."
He added that the Budget would provide "reassurance to businesses, provided that they are able to restart and rebuild according to the government's road map". But he warned that "if firms face unexpected bumps in the road, the chancellor must be prepared to take action until the economy is firing on all cylinders again."
Mike Parkes of GoSimpleTax said: "As expected, SEISS grant four was confirmed, topped up by SEISS grant five that will run until September 2021. To apply, the self-employed must have filed their 2019/20 return no later than 2 March 2021. Whilst there are no increases to income tax rates, from April 2022 the personal tax allowances and bands will be frozen until 2026."
Michelle Ovens, founder of Small Business Britain, said: "This has been, as anticipated, a very 'small business' budget. Extension to September of key programmes such as furlough and SEISS, extension to VAT cuts and the business rates holiday, new grants and new programmes such as the new government-backed lending programme all recognise that the crisis is far from over for small businesses … As we look to get small businesses out of this emergency period, this support is absolutely critical. These measures will help small firms move through recovery and start to look at growth again."
Jonathan Geldart, director general of the Institute of Directors (IoD), described the Budget as a "solid platform for many businesses to relaunch as the economy reopens".
He said: "The chancellor's efforts to combine life support for the economy with measures to turbocharge growth is the right call … Overall there is much for businesses to get behind in this Budget, and the Treasury should remain prepared to extend support if the roadmap goes off course, whilst building on its stimulus package today to drive long-term growth well beyond our immediate recovery."
Support measures announced in the Spring Budget 2021 included:
- The furlough scheme is to be extended until the end of September; employers will have to contribute 10% in July and 20% in August and September;
- Two further SEISS grants will be paid to the self-employed in 2021;
- 600,000 of the newly self-employed will become eligible for the SEISS grants;
- The £20 uplift in Universal Credit will be extended for another six months;
- VAT for hospitality firms will remain at 5% until September, followed by an interim rate of 12.5% for six months;
- The business rates holiday has been extended until June and business rates will then be discounted for nine months;
- Non-essential retail businesses are to get re-opening grants of up to £6,000 per premises;
- Hospitality and leisure businesses (that will open later) will be eligible for grants worth up to £18,000.
Written by Rachel Miller.
Image supplied by HM Treasury on Flickr