Our team has analysed yesterday’s budget and we have now produced our 2021 Budget Report which covers off all the main issues you need to know as a business owner. Click below to download.
Rishi Sunak, the Chancellor, has confirmed some key changes that will impact you and your business. We are analysing the detail of the changes and we will update you very soon on what it means specifically for your business.
We feel that the Chancellor has listened to the concerns of business owners and their professional advisers and whilst the Treasury needs to balance the books, the good news is that the main tax rise (corporation tax) isn’t effective until 2023.
The ‘super deduction tax break’ (see below) looks very interesting and we will be looking more closely into this to see where our clients can benefit. Capital Gains Tax (CGT) rules appear to remain unchanged – but we will be checking the detail of the official budget report today.
The top 5 things you need to know today are:
1) Furlough extended until October 2021
This measure is helpful if your business needs ‘breathing space’ to enable your business and staffing levels to normalise steadily as the economy revs up after lockdown The scheme tapers with a 10% contribution expected by employers in July – and a 20% contribution in August and September. Speak to us for help in processing your new furlough claims accurately.
2) Corporation tax increase
Corporation tax will rise to 25% (up from 19%) in April 2023 – but only for firms with profits of more than £250,000. A new, ‘small profits rate’ will be established at 19% (as it is now) for firms with profits up to £50,000. In addition, the rate of 19% will taper up steadily to 25% for companies with profits above that level up to £250,000.
3) New ‘Recovery Loan’ Scheme
A new loan scheme (separate from bounce-back loans and CBILS) is being launched, of which 80% will be underwritten by the Government for lenders). We will be looking closely at who can apply, how the rates will work and what the lending criteria will be. So far we know that the loans range from £25,000 up to £10m and firms have until the end of the year to apply.
4) Super deduction tax break
A new super deduction tax break has been launched for firms that will reduce their tax bill by 130% of what they spend on investment. It’s a significant change to current capital allowances legislation. We will be checking this area very carefully.
5) Last orders…
Want to buy your local pub? A new £150m Community Ownership Fund will give you the chance to buy into endangered pubs, sports clubs, theatres, music venues and even post office buildings. Under the fund, which will open in the summer, community groups will be able to bid for up to £250,000 matched-funding to buy local assets to run as community-owned businesses. Bids are to open later in the year. Cheers!
New skills have been acquired by all business owners during the past twelve months. Entrepreneurs are a resilient bunch and many have successfully been able to evolve their businesses and their skillsets during the pandemic. In many sectors, they are beginning to thrive again or at least, as the vaccine is being rolled out, starting to feel more positive about the future.
Therefore, the mindsets of many business owners have turned from ‘survival mode’ to ‘growth mode’ as they tentatively seek to expand their teams to enable them to thrive in the looming post-Covid business climate.
For most people, business growth is synonymous with hiring new people.
Recruiting in a pandemic certainly presents its challenges. We talk to many business owners who say the way they hire people will have to change if they are to attract the best staff not only during lockdown but afterwards too.
On the one hand, it’s easier and more convenient than ever before to undertake interviews and assessments via tools like Zoom and Teams.
Attracting candidates digitally through social media and the ease of applying for jobs on platforms like Linked In means that, in theory, it should be simple to attract people to roles that need to be filled. Recruitment agencies can also play a positive role if they are fully tuned into the candidate you’re looking for and can articulate it well to the ‘marketplace’.
On the other hand, some people are reluctant to make the move from their existing employers in these times of uncertainty and competition is fiercer than ever before for the right candidate.
Alexander Knight & Co is a typical example of a business that is growing and hiring during 2021. We’re currently looking for a Newly Qualified Accountant to join our team (if you know somebody suitable please do feel free to send an email to alison@alexanderknightaccountants.co.uk).
It’s an attractive role -plenty of opportunity for the right candidate to succeed in a supportive environment, along with flexible working arrangements on a hybrid basis from our Grade A office space in Hale village. Despite us only just starting the search we’re in the fortunate position of having strong interest in the role already and we are happy to take our time in selecting the right candidate.
Some businesses, however, aren’t as fortunate as us and don’t have the luxury of time and/or the magnet of being an ’employer of choice’ in their marketplace. It’s these types of business that will have to work harder than ever before in modernising their recruitment process in order to attract good candidates in 2021.
If there’s one piece of advice I’d offer, based on my experience of running a business and working with many successful entrepreneurs, it would be that it is far better to wait for the right person to add to your team than recruit in haste and regret it for a long time afterwards. Taking care to select the right person for the job will pay dividends further down the line as we emerge from lockdown.
Accountants in Hale
