How the 2021 Budget Can Affect Your Business
When budget enters the picture, whether you like it or not, you have no choice but to deal with it. This is because the budget affects everyone, and even if it's a collective budget, such as the 2021 UK budget, it's worth keeping an eye on because it can greatly affect your business.
Though the 2021 UK budget makes a lot of noise and never fails to garner a spot on the headlines, many are still confused about it. Mainly, people aren't quite sure how it can influence their business and prospects and how it can affect their business and even personal tax affairs.
Since there are new policies outlined in this year's 2021 budget, it pays to know these changes so you can prepare your small business. In this article, we'll dive deeper into the 2021 budget and walk you through the key measures the UK government is introducing to small businesses like yours.
Change #1: Preparing for Reopening
Things are moving faster now that the vaccines have arrived, and many people are getting the jab. With that being said, the Government has mapped out dates for when business is allowed to fully reopen post-lockdown. This pathway reassures business owners that there is indeed a light at the end of this pandemic.
With the Furlough scheme's extension to September 2021, the Government has considered that some businesses may not be ready to open later in the year even when restrictions are lifted. On the other hand, Restart Grants will be available for hospitality businesses and high street stores. This gives shops the benefit of an extension to the current VAT cut.
Change #2: Recovery Loans will be Available
Even the most well-run business was unable to avoid financial challenges during the pandemic. If you were one of those who are barely keeping their head up during the pandemic, you might want to read up on the Recovery Loan Scheme.
According to the Government, from the 6th of April 20201, this loan will be available to businesses, guaranteeing loans between £25,000 and £10 million. If you're interested, look out for the guidelines of the Recovery Loan Scheme if short-term support is what your business needs during this pandemic.
Change #3: Self-Employment Support
One of the biggest shifts during the pandemic is that more people have gone the self-employed route. And if you were able to deal with your personal tax affairs earlier this year and have filed a tax return for the 2019/2020 tax, you can apply for the Government's quarterly SEISS grants.
Seeing that there are up to 600,000 self-employed workers, the Government has made sure to ease their financial burden and give them access to grants which will continue until September this year.
Change #4: Super Deduction on Equipment Investments
Since many businesses are hot and cold about investing in equipment, the Government created a super deduction that allows businesses to deduct investment costs from your tax bills. This reduces your taxable profit by up to 130%.
At first, this may sound a bit complicated. But look at it this way — if you are a construction firm buying £10 million of new equipment, the super deduction could reduce its tax bill by £13 million.
The Bottom Line: The 2021 UK Budget Really Affects Everyone
It pays to know the changes that were made in the 2021 UK budget. Now that businesses are gearing up and preparing for reopening, many are faced with financial instability. Thankfully, the Government has considered both small and big business struggles and have created pathways to help them get back on their feet.
So now that you're getting ready for a brighter year, it's best to work with a reliable accounting service and review the different loans and schemes that can apply to your business. This way, you can get all the support you need and give you the confidence to reopen again this year.
Are You Looking for Reliable Accountancy Services Near Me?
Anything related to finances can be intimidating. And if you can put all your financial worries under the bed, you could, but that shouldn't be the case. Thankfully, 1to1 Accountants makes managing your business finances much easier, thanks to their team of accounting experts.
We are one of the best accountancy firms in the UK, and we help different businesses. From small businesses to freelancers, we understand the importance of maintaining financial health in all parties. With that being said, give us a call today and learn more about how we can help you!