Covid-19 support measures

The key measures announced are summarised below: 

Furlough  

As expected, furlough was a key part of today's agenda.  

The Chancellor announced a welcome extension to the Coronavirus Job Retention Scheme (CJRS) "furlough" arrangement. Instead of it coming to an end on 30 April, it is now expected to end on 30 September 2021. 

CJRS is to be extended in its current format, meaning that employers can continue to furlough employees. However, they must continue to pay employees at least 80% of their pay (or £2,500 per month if lower) on a flexible or full-time basis.  

In return, employers will receive the following funding: 

• 80% of qualifying pay (capped at £2,500 per month) between 1 May – 30 June 
• 70% of qualifying pay (capped at £2,187.50 per month) between 1 July – 31 July 
• 60% of qualifying pay (capped at £1,875 per month) between 1 August – 30 September 

This tapering of Government support from July is similar to what was in place between August 2020 - October 2020. It is intended to help employers gradually unwind their furlough arrangements without facing a mountain of additional costs. 

Our more detailed article explores this further.  

Training & Apprenticeships 

The Government has one eye on the future of work too. Some of the highlights are summarised below: 

• An additional £126 million in England for high-quality work placements and training for 16-24-year-olds in the 2021/22 academic year.  Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee. 
• The Government will extend and increase the payments made to employers in England who hire new apprentices.  
  between 1 April 2021 and 30 September 2021.  Employers will receive £3,000 per new hire, compared with £1,500 per new apprentice hire (or £2,000 for those aged 24 and under) under the previous scheme. This is in addition to existing £1,000 payments provided to all new 16-18-year-old apprentices, and those aged under 25 with an Education, Health and Care Plan, where that applies. 
• The launch of the Government's Help to Grow Management programme for small and medium-sized businesses (SMEs) is designed to be completed alongside full-time work, with a range of online and interactive curriculum options. Participants would be required to fund just £750 to participate. They will be taken through ways to reach new customers, penetrate new markets, boost their profits, develop a strategy and engage and inspire their teams to learn new skills to help businesses grow and thrive in these unprecedented times.  UK businesses from any sector can benefit, although charities have been excluded.  If you have been operating for more than 1 year and have between 5 – 249 employees, this is an exciting and innovative way to develop your people and grow your business. 

The Government is keen to help support organisations develop and grow, and realises new skills and training programmes will be required, given the changing shape of society and the economy.   Utilising these measures is likely to help business to manage costs and stay resilient at a critical time for the UK. 

Loans, Grants & Cash flow 

Ensuring business have available cashflow has remained important, and further announcements were made on this today, during the Budget: 

1. Recovery Loan Scheme – From 6 April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses.  
    
   The scheme will be open to all businesses, including those which have already received support under the existing COVID-19 guaranteed loan schemes.  

1. Restart Grants – The Government will provide 'Restart Grants' in England of up to £6,000 per premises for non-essential retail businesses. In addition, they will also provide up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses.  

The Government is also providing all local authorities in England with an extra £425 million of discretionary business grant funding, on top of the £1.6 billion already allocated. Altogether, this support will cost £5 billion, bringing the total cost of these Covid-19 cash grants provided by the Government to £25 billion 

Residential Stamp Duty Land Tax (SDLT) 

There were no major SDLT surprises as the extension of the temporary £500,000 nil rate band had already been rumoured.  The nil rate band of £500,000 will now apply to purchases of dwellings in England or Northern Ireland with an effective date no later than 30 June 2021 and offers a maximum saving of £15,000 for purchases of £500,000 or more. 

To ease the return to the former nil rate band, there will be a transitional nil rate band of £250,000 in force between 1 July and 30 September before the nil rate band reverts to £125,000 on 1 October 2021.  The £250,000 nil rate band, however, only offers a maximum saving of £2,500 for purchases of £250,000 or more, so a failure to complete a purchase by 30 June 2021 could cost up to £12,500. 

The extension, which the Treasury estimates to cost some £1.6bn in lost revenue, aims to support the housing market and protect and create jobs.  The new mortgage guarantee scheme will provide longer-term support for 95% mortgages on homes with a value of up to £600k, which will be available up to 31 December 2022. 

Business rates  

Retail, hospitality, and leisure businesses will welcome the decision to extend 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. Nurseries will also qualify for relief in the same way as other eligible properties. There is also a renewal of the Airports and Ground Support Scheme for the first have of 2021-22 to the extent of 50% of their business rates liabilities, subject to a cap per claimant of £4m.  For those businesses seeking to repay business rate relief, the Government will legislate to ensure that these repayments are tax-deductible. 

VAT 

Hospitality & leisure 

In support of businesses in the hospitality and leisure sector, the temporary VAT rate of 5% on certain supplies (including hospitality, hotel and holiday accommodation and admission to certain attractions) has been extended until 30 September 2021. This will be followed by an interim VAT rate of 12.5% from 1 October 2021 to 31 March 2022. Although this measure does not apply to alcoholic beverages, there has been a freeze on alcohol duty. 

There is no guarantee the VAT savings will be passed on to consumers, but these measures should assist relevant businesses as they strive to recoup the losses incurred during the lockdown.  

Deferred VAT repayments 

Following the Chancellor's commitment in the Winter Economic Plan, a New Payment Scheme has been introduced, allowing businesses to opt to repay the deferred VAT by up to 11 interest-free installments.  A penalty of 5% will apply to businesses that have not either paid in full, opted into the New Payment Scheme, or made alternative arrangements with HMRC by 30 June 2021. 

Help for hardest-hit industries:  

And finally, for some of the hardest-hit sectors the Chancellor announced a £700 million investment in arts, culture and sports, ahead of lockdown restrictions lifting over the summer months. This includes The £90m of funding to support government-sponsored national museums in England and £300 million for major spectator sports, supporting clubs and governing bodies. 

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