Chancellor Rishi Sunak announced the first UK Budget since March 2020 amid continuing economic uncertainty and the eye-watering costs of the pandemic. Keep reading for the key highlights tradespeople will be interested to know about.
Here’s our breakdown of the announcements that could affect people working in the trades.
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It’s the eleventh year that there’s been a freeze on fuel duty rising – good news if you drive a van for work.
It’d been widely speculated that this year we’d see a 5p a litre increase, but, according to The Guardian, the government recognises people’s reliance on using their cars as a safe way to travel during the pandemic.
The announcement in today’s Budget means fuel duty will be frozen at 57.95p. Although that doesn’t rule out rising costs of oil at the pumps – a possibility reported by This is Money.
The Chancellor also announced greater incentives for businesses that take on apprentices and trainees with an extra £126 million going into the government’s traineeship scheme.
From 1 April 2021, companies can get a £3,000 cash incentive for each apprentice they hire – and there’s no age limit. Under the current scheme, apprentices need to be under the age of 25 for companies to receive £2,000 per hire.
This will go alongside the government’s existing Kickstart Scheme announced in July 2020.
Mr Sunak also announced details of a new ‘flexi-job’ apprenticeship, which allows apprentices to work with different employers across a sector.
So if you’re hiring apprentices in the trade industry, this could help you save money on salaries and fill any skills gaps in your workforce – a 'flexi-job' apprentice could bring fresh experience from other workplaces.
For many of the self-employed, the government's Self-employment Income Support Scheme has been a lifeline during the coronavirus pandemic.
This has been extended with a fourth grant from April, and a final fifth grant from May onwards, helping to compensate the self-employed for lost earnings.
And the scheme will now benefit even more people, as those who started businesses in 2019-20 will be able to claim – provided they’ve filed their tax return.
While the government said this should benefit 600,000 more self-employed people, there’s still many who can’t qualify for this loan.
Businesses are being encouraged to invest in infrastructure to support the country’s economic recovery with a new ‘super deduction’ tax relief.
Beginning in April 2021, this deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment. This could mean they can reduce their taxable profits by 130% of the cost.
This is thought to be good news for manufacturing and construction firms as investments are likely to be brought forward with these tax cuts.
Mr Sunak said: “We need an investment-led recovery.”
He gave an example that, under existing rules, a construction firm buying £10m of new equipment could reduce its taxable income for the year by £2.6m, but with the "super-deduction", the company could reduce it by £13m.
This focus on investment could filter down to benefit small businesses, providing opportunities for work and driving growth.
Melissa Geiger, KPMG UK’s head of tax policy, said: “The super-deduction will be welcomed by businesses, particularly those outside of London in the manufacturing sector.”
It’s been announced that the Job Retention Scheme (furlough) will be extended until the end of September 2021.
While many construction sites have remained open throughout the various national lockdowns, the furlough extension will come as a relief to many who’ve been uncertain about the future of their business.
The scheme was due to end in April, but now workers will be guaranteed 80% of their salary for an additional five months. Businesses will be asked to pay towards this cost as the economy re-opens though, with a 10 per cent contribution in July and 20 per cent in August and September.
Simply Business's UK CEO, Alan Thomas, said: “We welcome the decision to extend the furlough scheme through to the end of September. With small businesses accounting for 48% of all UK jobs, this is an essential lifeline for millions up and down the country, and is another show of support to the SMEs who will be key to our collective recovery.”
It had been suggested as a way to recover some of the mounting debts caused by the pandemic, and the Office of Tax Simplification previously recommended an increase in line with income tax – so this may feature in the Autumn Budget later in the year.
The Stamp Duty Land Tax holiday has been extended again until June 2021. This was introduced in July last year to encourage home buyers to bring their property purchase forward amid uncertainty due to the ongoing Covid crisis.
The Metro reported this was to avoid the ‘cliff-edge’ of the holiday ending and people potentially delaying or pulling out of transactions.
While designed to benefit the property market, the stamp duty holiday extension could have a positive effect for those working in the trades as people look to improve their new homes.
What are your thoughts on the Spring Budget 2021? Let us know in the comments below.
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