‘Build Back Better’ plan and financial support announced in the Budget

The Government has published its Build Back Better strategy for rebuilding the UK economy. It contains six key themes:

  • Infrastructure
  • Skills
  • Innovation
  • Levelling Up
  • Net Zero
  • Global Britain

You can read more here.

Furlough extended to September

The Coronavirus Job Retention Scheme (CJRS) is to be extended until the end of September, at the current 80% rate until July 2021 – one of the asks in the NCC’s lobbying campaign.

From July onwards, the government will introduce an employer contribution towards the cost of unworked hours of 10% for July, then 20% in August and September.

Reduced VAT Rate extension for holiday accommodation

The guidance on the reduced VAT Rate extension has been revised following the budget announcement. It is essentially the same as previously, except for the introduction of the 12.5% rate from 1 October 2021 to 31 March 2022. See the guidance here.

The guidance on attractions that are eligible for the reduced VAT rate extension has been revised. Examples included in the guidance are botanical gardens and factory toursRead the guidance here.

NB small businesses that are on the Flat Rate VAT Scheme will have their VAT rate changed for the 1 October 2021 – 31 March 2022 period – read how much is payable here.

Recovery Loans

The outline guidance on the new Recovery Loans that were announced on Budget Day have been published. Term loans and overdrafts will be available between £25,001 and £10 million per business.  Invoice finance and asset finance will be available between £1,000 and £10 million per business.

Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years. No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security. Read more on the Recovery Loans here.

Super-Deduction Guidance

From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:

  • a 130% super-deduction capital allowance on qualifying plant and machinery investments
  • a 50% first-year allowance for qualifying special rate assets.

The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.