THE 2021 BUDGET: SUMMARY AND OPINIONS
This is our round-up of the key points of the Chancellor’s March 2021 Budget on independent publishers, and small and medium sized businesses in particular.
COVID RELIEF SCHEMES
The Coronavirus Job Retention Scheme is to be extended until the end of September, though employers will be asked to contribute towards wages as it tapers off—10% in July and 20% in August and September.
The Self-Employment Income Support Scheme is also being extended until September via a fourth round of grants, this time reaching some self-employed people for the first time.
A new Recovery Loan Scheme will be available from 6 April to 31 December. It will offer loans of £25,000 to £10m, with 80% of the finance guaranteed by the government. Terms are up to six years, and no personal guarantees are needed on loans up to £250,000. The new scheme will succeed the Coronavirus Business Interruption Loan Scheme and ‘Bounce back’ micro loans scheme, which will both close at the end of March 2021.
There are no changes to the rates of income tax, national insurance or VAT. Tax-free and higher rate thresholds will be frozen until 2026.
Corporation tax on profits above £250,000 will rise from 19% to 25% in April 2023. The 19% rate will continue to apply for companies with profits below £50,000.
Businesses will be able to deduct some capital asset investment costs from their tax bills, by providing allowances of 130%. Businesses spending on equipment may be eligible for this.
As planned, the National Living Wage will increase to £8.91 an hour from April 2021, and will be extended to those aged 23 and over. The National Minimum Wage will be £8.36 for 21 and 22 year-olds and £6.56 for 19 and 20 year-olds.
As before, small and medium sized businesses will be able to reclaim up to two weeks of eligible Statutory Sick Pay costs.
Incentives for any businesses taking on apprentices will rise to £3,000.
Non-essential shops, including bookshops, are eligible for £6,000 Restart Grants to support their reopening in April. They will be delivered through local authorities.
CULTURE RECOVERY FUND
The Culture Recovery Fund, run by Arts Council England, will receive an extra £300m, and some publishers may be eligible for the next rounds of grants.
The IPG’s Croner Business Support Helpline is always available to answer queries on tax, HR, legal and many more issues. Details of how to access it are here (you will need to be logged in to view this page).
IPG Chair Martin Casimir writes…
“It is rare for a Conservative chancellor to promote the money they have spent and will spend, but these are extraordinary times. The outcome is that the levels of debt are eyewatering. Limited changes in tax were predicted and Rishi Sunak had little choice, given the pledges made around keeping the rates of income tax, VAT and National Insurance the same for the next five years.
Of course, there would be a credible argument for saying that things have changed to such an extent that increases are legitimate and this may have been accepted by the electorate. For now, it is stealth taxes and no doubt lots more of them over coming years; increases in corporate tax; and a fingers-crossed approach that the GDP predictions of growth come true and help eat away at the debt.
The range of business support that has been offered and continues to be offered is good for business and hard-pressed families who benefit from furlough and other loans. Extending the stamp duty holiday will be popular with some, but will make houses ever more unaffordable for many.”
IPG board member and Search Press director Caroline de la Bedoyere writes…
“The Devil will, of course, be in the detail, but at first glance the Budget did not have too many surprises for small and medium sized publishers. Of course, the increase in corporation tax was the big one, but at least you have to make some money before you have to pay it, and that’s not true of all taxes. Also welcome is the 130% allowance on capital expenditure, but what actually is allowable remains to be seen.
The extension of Covid support is also to be welcomed, but a glaring omission, in my opinion, was the lack of any sort of plan to invest in health capacity in order to minimise the chance of this crisis happening again. Surely we must now put this to the top of any priority list—or will we have to ‘save the NHS’ every year?”