Budget update by John Leake of Sci-Tech Daresbury

Manoj Ranaweera
Updated on

I have been so pre-occupied lately and only now realised about the budget announcement. John Leake of Sci-Tech Daresbury has done a wonderful job of summarising it, which I am sharing below with you.

 

Tax:

  • Corporation tax on company profits to rise from 19% to 25% in April 2023.
  • Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000 and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
  • Beginning in April 2021, a new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment. This is worth around £25 billion to UK companies over the two-year period the super-deduction will be in full effect.
  • Capping the amount of SME payable R&D tax credit that a business can receive in any one year at £20,000 (plus three times the company’s total PAYE and NICs liability).

 

Furlough scheme:

  • Furlough to be extended until the end of September.
  • Government to continue paying 80% of employees’ wages for hours they cannot work.
  • Employers to be asked to contribute 10% in July and 20% in August and September.

 

Support for self-employed:

  • Support for the self-employed to be extended until September
    • For February – April it will be worth up to 80% of trading profits, averaged over three months, up to £7,500 in total.
    • For May – end of September, if your turnover has fallen by at least 30% you can claim 80% of trading profits up to £7500.
    • For May – end of September, if your turnover has fallen by less than 30% you can claim 30% of trading profits up to £2850.
  • Those who had only started trading in the 2019-20 tax year will now qualify for these new payments as long as they have completed tax returns for the 2019-2020 financial year and filed their return by midnight on 2 March 2021.

 

Business support & skills:

  • The £375 million UK-wide ‘Future Fund: Breakthrough’ will invest in highly innovative companies such as those working in life sciences, quantum computing, or clean tech, that are aiming to raise at least £20 million of funding.
    • The government will take a stake in these scale-ups, with private venture capital matching its contribution.
  • A new UK-wide Recovery Loan Scheme (https://www.gov.uk/guidance/recovery-loan-scheme) to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.
  • Incentive grants for apprenticeships to rise to £3,000 with incentive available until September 2021
  • Help to Grow campaign (https://helptogrow.campaign.gov.uk/) provides:
    • 50% discount on approved software up to the value of £5000 to help in the following areas:
      • build customer relationships and increase sales
      • make the most of selling online
      • manage their accounts and finances digitally
    • 90% discount on a 12 week online business programme with leading business schools  – total cost £750

 

Freeports:

    • Eight new English Freeports will be based in East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside.

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