Spring Budget 2021: Updates for retail
Last week saw Chancellor Rishi Sunak announce the Spring Budget, with plans to support the UK economy as we emerge from the Covid-19 pandemic. It’s no secret that the pandemic has hit retail hard and is likely to have a lasting effect on the industry as we know it. So, what does the budget mean for retail and what do you need to know? We’ve outlined the key points right here:
Business rates relief
In England, the business rates holiday will be extended until the end of June. This means retail properties will be 100% tax free until this time. For the remainder of the 2021/22 tax year, business rates will remain reduced by 66%. For retail properties in Scotland and Wales, 100% relief will be extended for 12 months.
The Chancellor announced a £5bn council grant which will allow “non-essential” retailers to claim up to £6,000 per premises. Hospitality and leisure businesses are eligible for £18,000 per premises. An additional £300m in funding was also announced for theatres, museums and live music venues and communities can also apply for up to £1m to support local pubs.
The furlough and self-employment income support schemes will be extended until the end of September. Furloughed employees will continue to receive 80% of their wages until the scheme ends, but businesses will be asked to contribute 10% in July and 20% in August and September.
Contactless payment limit increase
Later this year, the limit for contactless payments will rise from £45 to £100, enabling safe transactions at higher price points.
- 5% reduced VAT rate for hospitality and accommodation extended for six months to 30 September, followed by an interim rate of 12.5% for a further six months.
- No rise in Income Tax, NI or VAT. Personal tax thresholds will be frozen until April 2026 after next year's planned increase.
- £20 boost for weekly Universal Credit payments extended for six months.
- Tapered extension of the stamp duty holiday (nil rate band up to £500k to end on 30 June, but will remain for up to £250k until 30 September, double the standard level).
- Alcohol duties frozen for a second year in a row. Planned increase in fuel duty also cancelled.
Looking to the future
In the medium term, the Chancellor announced that from 2023, corporation tax will rise by 25% to address the budget deficit, indicating a “spend now, pay later” mentality. Investment in infrastructure will also be a focus to sustain recovery with plans to create a “green” infrastructure bank to tap into sustainability efforts.
Keep up to date with all the latest retail news right here on the Glee blog.
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