BUDGET 2021: Restart grants of up to £18,000 offered to personal care businesses

Chancellor of the Exchequer, Rishi Sunak, delivered his Budget statement at 12.30pm on Wednesday 3 March, unveiling a three-part plan to protect the jobs and livelihoods of the British people affected by the coronavirus pandemic.

The UK government has borrowed a record £280bn so far to help alleviate the impact of Covid-19 on businesses, however the personal care sector has been fighting for support, with many self-employed persons deemed ineligible for funds over the last 12 months. Such initiatives include the national Save Our Salons campaign which has been pushing for a temporary reduction in VAT.

Key points from the 2021 Budget affecting personal care businesses include:

• The furlough or ‘job retention’ scheme – which pays 80% of employees’ wages – will be extended until the end of September 2021. After July, businesses will be asked for a 10% contribution, rising to 20% in August and September.
• Support for the self-employed will be extended to September.
• As the economy reopens in the summer, the government will help people whose turnover has fallen by 30% or more the most.
• The universal credit uplift of £20 a week will go on until September.
• The National Living Wage will rise to £8.91 from April.
• Businesses will be given incentive payments of £3,000 for new hires of any ages.
• Corporation tax will increase to 25% in 2023. Only businesses with profits of £250,000 or greater will be taxed at the full 25% rate.
• Small businesses with profits of £50,000 or less will be protected by a Small Profits Rate, maintained at the current rate of 19%.
• Mentioning the personal care sector, the chancellor announces £5bn for new Restart Grants in April ‘to help businesses reopen and get going again’. Non-essential retail businesses in England will receive a one-off cash grant of up to £6,000 per premises. Hospitality and leisure businesses – including personal care and gyms – ‘will be more impacted by restrictions when they open’ so can receive grants of up to £18,000.

Sunak thanked Caroline Nokes, women and equalities committee chair for highlighting the particular needs of the personal care sector.

Sunak comments: “Even with the new Restart Grants, some businesses will also need loans to see them through. As the Bounce Back Loans and Business Interruption Loans schemes come to an end, we’re introducing a new Recovery Loans Scheme to take their place.” To apply for a Restart Grant, contact your local authority.

Businesses of any size can apply for loans from £25,000 up to £10m, through to the end of this year. The government will continue to stand behind these Recovery Loans, providing lenders with an 80% guarantee.

Find out if your business is eligible for a Restart Grant by clicking here.

The announcements come as part of a three-part plan to protect the jobs and livelihoods of British people:

1. To continue doing whatever it takes to protects jobs and households.
2. Begin fixing public finances.
3. Build our future economy.

Sunak comments: “A year ago, in my first Budget, I announced our initial response to coronavirus. What was originally thought to be a temporary disruption to our life has fundamentally altered it.

“Much has changed, but one thing has stayed the same; I said I would do whatever it takes. I have done and I will continue do so. We have announced over £280bn worth of support; protecting jobs, keeping businesses afloat and helping families get by… but the damage coronavirus has done to our economy has been acute.

“Our economy has shrunk by 10%, the largest fall in over 300 years and borrowing is the highest it has ever been outside of wartime.”

Notes for the self employed:

Commenting on self-employed support, Sunak said: “When the scheme was launched, the newly self-employed couldn’t qualify because they hadn’t all filed a 2019-20 tax return.

“But as the tax return deadline has now passed, I can announce today that, provided they filed a tax return by midnight last night [2 March), over 600,000 more people, many of whom only became self-employed last year can now claim the fourth and fifth grants.”

The 4th grant will cover February to April, worth 80% of average trading profits up to £7,500. A 5th grant will be available from May.

“Our comprehensive response is one of the most generous in the world, and the Office for Budget Responsibility (OBR) predicts a return to pre-Covid level by the middle of next year, six months faster than originally thought,” he commented.

“But while our prospects are now stronger, coronavirus has done and is still doing profound damage. Repairing this will take time.

“Every job loss is a tragedy so creating, protecting and supporting jobs is my priority.”

For more information on grants and to apply, visit www.gov.uk

Lead image courtesy of Cubankite / Shutterstock.com