Budget 2021 - Key Points for Tourism
3rd March 2021
There is some good news for tourism businesses in the Budget today, including the retention of the 5% VAT and extension of furlough and business rates holiday. The Chancellor also announced Restart Grants: Hospitality and Leisure businesses will get grants of up to £18,000.
Read more here for a summary of all key points.
General Economic Status
· 700,000 people have lost their jobs, the economy shrank by almost 10% last year
· OBR forecast is for GDP to grow 4% this year, then by 7.3% in 2022, and then 1.7%, 1.6% and 1.7% in the last three years of the forecast
· Unemployment predicted to peak at 6.5%
· The government is borrowing 17% of GDP this year
· Next year borrowing will be 10.3% of GDP
· 5% rate extended for another six months followed by a 12.5% rate for a further six months
· 100% businesses rates holiday until June, followed by a two-thirds discount for the rest of the year.
· The discount is being capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.
· The government will legislate to ensure that the business rates relief repayments that have been made by certain businesses are deductible for corporation tax and income tax purposes.
· To be extended until the end of September at the 80% rate until July
· From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September,
· Non-essential retail businesses will receive grants of up to £6,000 per premises.
· Hospitality and leisure businesses will get grants of up to £18,000.
· An additional £425 million of discretionary business grant funding, on top of the £1.6 billion already allocated.
· People whose turnover has fallen by 30% or more will continue to receive the full 80% grant.
· People whose turnover has fallen by less than the 30% will therefore have less need of taxpayer support, and will receive a 30% grant.
· 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 July.
Recovery Loan Scheme
· From 6 April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million
· The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.
Support For Airports
· The government is renewing the Airports and Ground Operations Support Scheme for a further six months from the start of 2021-22. This will provide support for eligible businesses in England up to the equivalent of half of their business rates liabilities during 2021-22, subject to certain conditions and a cap per claimant of £4 million.
Extend Zoo Animals Fund
· The government will extend the Zoo Animals Fund for a further three months until 30 June 2021.
Culture Recovery Fund
· The government will provide a further £300 million to extend the Culture Recovery Fund
National Museums and Cultural Bodies
· The government will provide £90 million for continued support for government-sponsored National Museums and cultural bodies in England.
Extended Loss Carry Back
· The trading loss carry-back rule will be temporarily extended from the existing one year to three years. This will be available for both incorporated and unincorporated businesses.
Unincorporated businesses and companies that are not members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22
Companies that are members of a corporate group will be able to obtain relief for up to £200,000 of losses in each of 2020-21 and 2021-22 without any group limitations
Companies that are members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22, but subject to a £2 million cap across the group as a whole
· From today, the maximum amount that can be paid through contactless payment will be raised from £45 to £100
· Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee.
· Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire
Corporation Tax Rate
· This will increase to 25% on April 2023
· A Small Profits Rate of 19% will apply to businesses with a profit of over £50,000
· There will be a tapered rate between profits of £50,000 and £250,000
Super Investment Tax Deduction
· To encourage investment, from 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will benefit from a 130% first-year capital allowance. This upfront super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest,
Air Passenger Duty
· APD rates will increase in line with RPI from April 2022
· No increases this year
· No increases this year
· The government will legislate in Finance Bill 2021 to raise the Gross Gaming Yield bandings for gaming duty in line with RPI.
· A UK Infrastructure Bank will be established in Leeds with £12bn.
· Eight Freeports announced. They will be in East Midlands Airport, Liverpool, Felixstowe, Humber, Plymouth, Thames, Teesside, and Solent
Levelling Up Fund
· The government is launching the prospectus for the £4.8 billion Levelling Up Fund today.
· The Fund will invest in infrastructure, including town centre and high street regeneration, local transport projects, and cultural and heritage assets.
Community Ownership Fund
· a £150m fund will be set up to allow communities to take ownership of pubs, theatres, shops or sports clubs at risk of closure.
Community Renewal Fund
· The government is launching the prospectus for the £220 million UK Community Renewal Fund
Help to Grow: Management
· The government will offer a new UK-wide management programme to upskill 30,000 SMEs in the UK over three years.
Find the full document here.