The UK chancellor of the exchequer has confirmed that the furlough scheme will be extended to the end of September 2021.
In his Budget announcement, 3 March, chancellor Rishi Sunak told the House of Commons that the furlough scheme will continue to pay 80% of peoples’ wages for hours not worked until 30 September. From July, employers will be expected to contribute 10% of this support themselves, rising to 20% in August and September.
The chancellor confirmed that the 100% rates holiday would remain until the end of June, reducing to two-thirds for the remainder of the year. “For the remaining nine months of the year, business rates will still be discounted by two-thirds, up to a value of £2m for closed businesses, with a lower cap for those who have been able to stay open,” he told the House of Commons, 3 March.
On VAT, Sunak confirmed the 5% reduced rate of VAT will be extended for six months to 30 September followed by interim rate of 12.5% for another six months. The standard rate will not return until April 2022.
Corporation Tax (which is a tax on profit) will rise to 25% in April 2023, which will impact larger, more profitable companies.
The chancellor made it clear that he wanted to see more investment, and announced details of a ‘super-deduction’, which is a tax break for firms that invest. The move could boost investment by 10%, he said.
Further grants will be offered to the self-employed, with a fourth and fifth round of grants planned to be released before September. A further 600,000 people can claim support.
Support for events
The chancellor unveiled a £700m (US$977m) fund to help support arts, culture and sport. The fund will be available to help bids for international events, such as the FIFA World Cup 2030, but whether or not it can be used to attract international congresses remains unclear.
A statement released by the UK’s Business Visits and Events Partnership (BVEP) welcomed the Chancellor’s announcements on the extension of the furlough scheme, support for the self-employed, the introduction of the Restart Grants, the extension of business rates relief and VAT. However, it called for a clarity on the funding. “There’s a need to look more closely at the extent of these and other measures in so far as they apply to the Events Industry, including the additional funds allocated for the Cultural Recovery Fund,” the statement read.
“Previous announcements of similar measures have not always extended to event business and freelancers. Recent research shows delivering additional payments to businesses through local authorities has been slow and, in some cases, non-existent.
“Until the fine detail of the announcements becomes clear the Industry remains cautious in its appreciation of the impact on the measures in helping the Industry sustain its activities until the planned reopening in May and June.”
Restart grants for hospitality and leisure businesses, up to £18,000, will also be made available.