Rishi Sunak has announced new measures as part of the COVID-19 recovery plan to support the economy through the end of the pandemic. The announcement of scheme extensions, new grants and reduced VAT are set to help UK businesses through the final stages of COVID-19 restrictions.
Some of the key points of the recent announcement include:
- The furlough scheme which pays 80% of employee’s wages will be extended until the end of September. However, employers will be expected to pay 10% towards hours their staff did not work in July. This will increase to 20% in August and September, as the economy reopens.
- Reduced VAT rate – The 5% reduced rate of VAT for tourism and hospitality will be extended until the end of September.
- 600,000 more self-employed people will also be eligible for grants if they submitted their tax return on time for the new financial year.
- The 100% business rates holiday in England will continue from April until June.
- Stamp duty will stay at reduced rates until the end of June, with the nil rate band at £250,000.
- New grants to be introduced for businesses in March. Non-essential businesses will be able to claim up to £6,000 per premises and businesses in the leisure and hospitality sector will have access to grants of up to £18,000 as they are due to open later in the year.
- The main rate of corporation tax will be increased to 25% from April 2023 for companies with profits of at least £250,000. At the same time, a new small companies’ rate of 19% will apply to companies with profits of up to £50,000.
- The personal allowance will rise to £12,570 and the higher rate threshold will be £50,270 for 2021/22 and both will then be frozen for the next four years.