The budget follows a year of extraordinary economic challenge as a result of the ongoing Covid-19 pandemic. In the face of the pandemic & its threats, the government had to act fast in order to provide support and protection for businesses and public services across the UK.
Continuously adapting its economic response as the pandemic continued to evolve. Whilst the pandemic isn’t anywhere near to being over, it is clear that there is now a path to the reopening of the economy.
In this blog you will find clearly set out steps that the government will be taking to support the recovery. These include:
- Providing new incentives for business investment and help businesses to attract the capital, ideas, and talent to grow.
- Taking the most sustainable route to continue providing the support.
- Striving to create an outward-looking, low carbon, high-tech economy.
The Budget: its context
It was pretty evident that the pandemic hit us hard. As it hit, the UK entered its first recession in 11 years. And society felt it. Gross Domestic Product (GDP) decreased by 24% between February and April of 2020. However, the output did begin to rise as restrictions were lifted. Making the overall fall of the GDP at 9.9% (the largest annual fall in 300 years!).
I’m sure you will be able to relate to the fact that many businesses had no choice but to halt their hiring. This also consequently raised redundancies and left many without any jobs.
The OBR predicts that the significant £100 billion capital programme proposed by the government will boost business investment. Growing it by 10% at its peak in 2022-23.
Unfortunately, due to unforeseen circumstances, borrowing also hit its highest levels. Reaching 16.9% of GDP in 2020-21. Peaking the UKs underlying debt to 97.1% in 2023-24.
The public, the jobs, and the British people’s livelihoods
Here’s a list of all the economic support that was provided by the government for Covid-19:
- £20 billion grants to businesses
- £10 billion of business rates holidays
- £73 billion on loans and grants
- Coronavirus Job Retention Scheme (CJRS)
- Income Support Scheme
- Self-Employment Income Support Scheme
- Increased Universal Credit & Working Tax
- Expanded statutory sick pay
- Help with Rent & Council Tax
What (they say) we can expect:
- Extended CJRS and SEISS – providing protection to businesses and individuals
- Extending the temporary Universal Credit Increase & making one-ff payment to working tax credit
- Changes in rates for a range of taxes & duties including freezes in fuel and alcohol duty
- UK-wide mortgage guarantee scheme – making home ownership more achievable
- Temporary cut in stamp duty land tax
- Extension on business rates reliefs
- Statutory sick pay support
- VAT cut for the UK’s tourism and hospitality sector (music to our ears). To support the transition a 12.5% rate will apply until 31st of March 2022.
- Recovery loan scheme – allowing the UK to have access to the finance they need
- New one-off Restart Grant – provide businesses certainty in order to plan ahead and safely begin trading again
Road to recovery
The government are currently in the process of laying out the foundations for a recovery. This is primarily driven by the private sector, spreading investment and opportunity. With the mission to help business grow and improve access to skills, capital, and ideas.
- Super-deduction tax incentive for companies in PLANT and MACHINERY. This means for every £ invested companies can expect to see taxes cut by up to 25p.
- Aid for businesses to have access to skills, technology, and capital needed by:
– modernising and streaming migration rules
– reviewing tax support for research & development
– reforming pension rules on investment and for equity offering
– Future Funds: breakthrough to support the scale up of most innovative businesses that are focused on research and development
- Create 8 new ‘Freeports’ in England – businesses will benefit from more generous tax reliefs, simplified custom procedures as well as further government support
- Extensions to furlough, self-employment support, business grants, loans, and VAT cuts
Totalling the financial support to over $407 billion
- Business rates holiday = extended by 3 months. This means that retail, hospitality, and leisure properties in England will pay NO business rates from 1st of April 2021.
In summary, the Budget for the year coming appears to be promising for the business world. With more support and accessibility to growth, development, and overall success. To find out more about the Budget, please visit www.gov.uk/government/topical-events/budget-2021. Join the industry that is not only booming but is also getting the recognition it deserves from the government. Become our member to at the Park Home and Holiday Park Association.