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Deeper dive into the Spring Budget business support schemes

by Nikki Dale -

Listening to the UK’s Spring Budget (3rd March 2021) we heard the chancellor keep his promise to do ‘whatever it takes’ to support the UK by protecting jobs, keeping businesses afloat and helping families get by.

The governments measures and support are steering the UK away from a negative bound sentiment in the property market and the UK has seen a property market boom since it re-opened last May, following a two-month closure during the first UK lockdown. This is largely thanks to the government interventions.  By protecting jobs and keeping employment from escalating, it helps stabilise the property market as more people can afford their rent and afford their mortgages and means less people are forced into panic selling.

How the government plan to help businesses and protect jobs 

Sadly, many businesses have been profoundly impacted during the pandemic, especially in the hospitality, retail, entertainment, accommodation, leisure and personal care sector. The chancellor introduced or confirmed extension on a number of schemes that will offer continued support to businesses.

The new Restart Grant programme to help business.  Available from April for industries that have been affected by the pandemic.  They will be worth up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for  hospitality, entertainment, accommodation, leisure and personal care and gym businesses.

A new Apprenticeship Scheme where the government will provide companies an incentive programme of £3,000 to hire – without age limit.  This already sounds a lot better than the Kick Start scheme that was announce last year.

Recovery Loan Scheme which will be available to businesses of any size from £25,000 to £10 million and elements of these loans will come with government guarantees – more details on this will be available soon.

100% business rates holiday continued until the end of June, with then a two thirds of business rates until the end of the year.

5% reduced rate of VAT extended for six months, until the end of September 2021, for the tourism and hospitality sector.  Then, a rate of 12.5% VAT for six months following that.

The pandemic support package

£65 billion of measures to support the economy over this year and next in response to coronavirus.  The chancellor conveyed with a current support package for the coronavirus of £352 billion, in total it will be £417 billion.  OBR fiscal forecast shows the UK has borrowed a record amount, the highest since World War 2 – £355 billion / 17% of national income.

Rishi Sunak said “Without corrective action, borrowing would continue at extremely high levels leaving underlying debt rising indefinitely.”

Conveyed was, borrowing falls to 4.5% of GDP in 22/23, 3.5% in 23/24 and 2.9% and 2.8% in the following two years. He added. “while its right to help people and businesses, we can’t allow the debt to keep growing. We need to start fixing our public finances.  Asking more from those who can afford.”

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