Updated 9th March 2021
Small businesses have a lot to deal with in 2021, whether it’s related to new Brexit rules or continued pandemic restrictions. This is having an impact on small business confidence. But nimble small businesses have already demonstrated that they can stay ahead of the curve.
At Xero, we are monitoring the situation closely to see how we support our 600,000+ subscribers as they adapt to change. Here are some of the developments that you need to know about.
The government is stepping up to provide support to small businesses for both COVID-19 Brexit.
In terms of coronavirus support, the government has announced measures to allow businesses to pay back deferred VAT, as well as extending temporary VAT reductions for the hospitality and tourism industries. The Bounce Back Loans Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) are both available to eligible businesses until the end of November, as are applications for the government’s Future Fund. For more details on how to apply and information about other schemes, visit the British Chambers of Commerce.
In anticipation of Brexit, the government previously made grant funding, worth £16 million, available to help businesses make IT improvements and participate in training to help complete customs declarations and processes. Additionally, several grants are still available for small businesses to prepare for any Brexit eventuality.
2021 budget updates
In the 2021 Treasury budget, the government announced several measures that will affect small businesses. The furlough scheme has been extended until the end of September, although in July businesses will be required to increase their contribution to 10% and then to 20% in August and September.
Those who are self-employed and can demonstrate with tax returns that they were trading in 2019-2020 will be eligible for the next round of financial support. Claims open in April, and the self-employed can claim 80% of three months’ average trading profits up to a total of £7,500.
Until 2022, business rates will continue to be discounted by two thirds, up to a value of £2m for businesses that have been forced to close by Covid (a lower cap is available to businesses that have been able to open.) Small businesses can also pay a lower corporate tax rate. Businesses with profits of £50,000 or less will be exempt from the 2023 corporation tax increase to 25 percent.
The government has also introduced the Help to Grow digital training programme and grants scheme to support small businesses. All small businesses are eligible for a £5,000 grant to spend on Government-approved productivity software.
High street businesses will have access to a new £5bn Restart Grant scheme. Leisure and hospitality businesses will be able to claim up to £18,000, and non-essential retail can access up to £6,000.
The full budget document offers further details on the policies which will affect British businesses.
Other useful resources
The government also recently launched a new campaign to help prepare the UK for the end of the Brexit transition campaign. The effort, which is called “The UK’s new start: let’s get going”, adds to existing “check, change, go” advice on the transition website.
Who to speak to?
If you’ve seen some of the resources available and are still seeking clarity, the best person to speak to is your accountant. They will be spending a lot of time understanding the implications of the imminent Brexit deadline and the ongoing coronavirus crisis on your business, and they can help you put together a plan. Working with an accountant also means that business owners will have more time to focus on running the business and keeping it in good shape to take on tomorrow’s challenges. If you want to find the right accountant for the job, find one here.
There are a lot of unknowns ahead – but it’s not impossible to plan for what might come. Use available resources, speak to experts, and make sure you have the right technology in place to adapt to change – only then will you be ready for the ride ahead.
Visit our dedicated Brexit Hub for more advice.