UK Government Budget
Yesterday, the Chancellor announced the Government’s budget for the coming year. The full details can be found here, UK Budget 2021.
A number of measures were announced that will affect our industry with regard to furlough, the self-employed, apprentices and investment. These are:
- An extension of the Coronavirus Job Support Scheme to September 2021 across the UK.
- An extension of the UK-wide Self Employment Income Support scheme to September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.
- A new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.
- Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
- £7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.
- Additional £126 million for 40,000 more traineeships in England, funding high quality work placements and training for 16-24 year olds in 2021/22 academic year.
- Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
- To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
- Beginning April 2021, the new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment. This is worth around £25 billion to UK companies over the two-year period the super-deduction will be in full effect.
- A new Help to Grow scheme to offer up to 130,000 companies across the UK a digital and management boost.
Airbus and Boeing disputes update: Announcement on mutual suspension of tariffs
The UK and US have today committed to a joint de-escalation of the long-running Airbus-Boeing dispute, as the US announces suspension of retaliatory tariffs on a range of UK goods. The United States will temporarily suspend all retaliatory tariffs on direct exports from the UK to the US resulting from the Airbus dispute for four months, in an effort to reach a negotiation solution to the 16- year long dispute.
We have published further details about this tariff suspension on GOV.UK, and this can be found here.
