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The Budget 2021 – What do FMs Need to Know?

The Budget 2021 – What do FMs Need to Know?
03 March 2021 | Updated 19 April 2021
 

As Chancellor Rishi Sunak reveals this year’s Budget, what are the main points that facilities managers should be aware of?

The annual Budget is set by the HM Treasury for the next financial year, giving details of expenditures of the public sector and the government's tax and spending plans.

This year, Sunak focussed on his three-point plan: supporting businesses and families through the pandemic, investment-led recovery as the UK emerges from lockdown and future changes to strengthen public finances.

Here is a brief summary of today’s Budget:

 

Furlough and COVID-19 Support

 

The Coronavirus Job Retention Scheme will be extended until September 2021 and the Self-Employment Income Support Scheme (SEISS) will continue with a fourth and a fifth grant. The Chancellor announced that more than 600,000 people, many of whom became self-employed in 2019-20, may now be able to claim direct cash grants under SEISS.

In addition, the business rates holiday in England has been extended by an additional three months. That means 750,000 retail, hospitality and leisure properties in England will pay no business rates for three months from 1 April when combined with Small Business Rates Relief, with further relief available for the rest of the year.

The government has also extended the temporary 5 per cent reduced rate of VAT until 30 September 2021. To help businesses manage the transition back to the standard rate, a 12.5 per cent rate will then apply for a further six months, until 31 March 2022.

Grant funding will be available to businesses in England through a new £5 billion Restart Grant scheme to help the high street, providing up to £18,000, bringing the total spent on business grants to £25 billion.

A new Recovery Loan Scheme will also be launched to replace the existing government guaranteed schemes which have supported £73 billion of lending to date and close at the end of March.

 

Jobs Support

 

As part of the UK Government’s Plan for Jobs to support, protect and create jobs, the Chancellor is increasing support with £126 million of new money to enable 40,000 more traineeships, and doubling the cash incentive to firms who take on an apprentice to a £3,000 payment per hire. 

The National Living Wage will be increased to £8.91 from April and there will also be a six-month extension of the £20 per week Universal Credit uplift, with eligible Working Tax Credit claimants receiving a one-off payment of £500.

£700 million will support the UK’s arts, culture and sporting institutions as they reopen, backing the UK and Ireland’s joint bid to host the World Cup in 2030.

 

Corporation Tax

 

To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25 per cent, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023.

Businesses with profits of £50,000 or less, around 70 per cent of actively trading companies, will continue to be taxed at 19 per cent. A tapered rate will also be introduced for profits above £50,000, so that only businesses with profits of £250,000 or greater will be taxed at the full 25 per cent rate.

 

Building Back Better

 

The Budget also coincides with the publication of the government’s new Build Back Better strategy.

130,000 small and medium-sized businesses will be supported through the new Help to Grow scheme, providing the digital and management tools needed to innovate, grow and help drive recovery.

Beginning April 2021, a new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment meaning they can reduce their taxable profits by 130 per ceny of the cost. This is worth £25 billion to companies over the two-year period the super-deduction will be in full effect.

 

Green Recovery 

 

And to help progress the Prime Minister’s Ten Point Plan for a green industrial revolution, new port infrastructure will be built to support the next generation of offshore wind projects in Teesside and Humberside. The UK will issue at least £15 billion in green bonds to help finance the transition to net-zero and the government will launch the world’s first sovereign green savings bond for retail investors.

Additional green measures include:

  • £20 million to fund a UK-wide competition to develop floating offshore wind demonstrators and help support the government’s aim to generate enough electricity from offshore wind to power every home by 2030.
  • £68 million to fund a UK-wide competition to deliver first-of-a-kind long-duration energy storage prototypes that will reduce the cost of net zero by storing excess low carbon energy over longer periods.
  • £4 million for a biomass feedstocks programme in the UK to identify ways to increase the production of green energy crops and forest products that can be used for energy.

Picture: a photograph of a calculator, pen and paperwork

Article written by Ella Tansley | Published 03 March 2021

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