OneWorldExpress
The pressure caused by COVID-19 and Brexit uncertainty has been relentless for UK businesses.
So much so, a recent survey of over 750 business leaders, commissioned by One World Express, revealed that the combination of the two made 2020 the hardest year on record for almost two thirds (64%) of organisations.
Such strain is likely to continue for some months, particularly when COVID-19 is concerned.
The Government has set out the roadmap for a return to normality; but it is a gradual one. It will take some time for UK businesses – particularly those within retail, hospitality and leisure – to return to their pre-COVID capacity.
As such, it was hoped that Chancellor Rishi Sunak would use the Budget 2021 on 3rd March to announce continued emergency support for firms...
Extended emergency support
As Budget day approached, the Chancellor came under increasing pressure to extend vital business support schemes, at least until 21st June 2021 – the touted date at which UK social distancing restrictions will be lifted.
Mr Sunak lived up to these expectations; a move welcomed by many. It was announced that the furlough scheme has been extended until the end of September 2021. It was also confirmed that low VAT rates of 5% for hospitality firms would continue until September.
Meanwhile, support for the self-employed was also extended and the eligibility pool was widened, meaning that 600,000 more people would now be able to access such support.
Our CEO, Atul Bhakta welcomed this decision. With the Government’s roadmap to normality being understandably cautious, continued support was unavoidable. So, these extensions provide business decision makers with the opportunity to develop their post-COVID recovery plan, with a more stable financial footing.
Realistically, however, it will take companies months, if not years, to return to their pre-COVID operational capacities. A few months extension of emergency support schemes may not be enough to help some businesses weather the COVID storm.
So, has the Chancellor developed a sustainable, long-term plan to help businesses survive?
Long term measures
Promisingly, the Chancellor also used the Budget 2021 to reveal a “small profits rate” to benefit smaller businesses. This means that the tax rate on company profits for small business, with profits of £50,000 or less would remain at 19%. Meanwhile, businesses taking profits of £250,000 or more would see their tax rates increase from 19% to 25% as of April 2023.
What’s more, he has also pledged to use tax breaks to “unlock” £20bn of businesses investment.
This is certainly a positive step to aid the long-term recovery of small businesses. It reaffirms the Government’s commitment to the entrepreneurial spirit of the UK; in terms of nurturing existing organisations and inspiring the birth of new ones – a concept that One World Express has long supported.
Naturally, the devil is in the detail with such announcements. The Chancellor must clearly outline exactly how the additional investment will be unlocked, as well as further details about the proposed changes to the taxation system for businesses.
It is highly likely that all will become clearer on 23rd March – otherwise known as “Tax Day” – where the Government will announce its various consolations(consultations?) into changes to various tax policies. Business across the UK will be watching this closely, to consider the sustainability of these changes, and how they will impact them.
The Budget 2021 certainly offered a promising outlook for UK businesses. From continued emergency support, to favourable tax changes for smaller businesses, it is clear that the Chancellor is fulfilling his commitment to protecting UK businesses.
Of course, there will continue to be challenging times ahead. However, with adequate support from the Government, organisations should be confident that they will not only recover, but thrive, post-COVID.
