The Chancellor’s Budget was perhaps the most anticipated since the war. Covid, lockdown and the unprecedented peacetime disruption that has followed called for drastic measures and a borrow and spend programme in excess of £100bn. His strategy is clear; that he’ll do whatever it takes to safeguard the UK economy.
While this is comforting, what does it mean for small and medium sized enterprises (SMEs)? As one of the UK’s leading small business insurance brokers, Coversure are accutely attuned to the needs of SMEs and here are our five key takeouts from the Chancellor’s speech:
1. Furlough extended to end of September – this has been a lifeline for SMEs of all kinds, but particularly for those with hospitality and events businesses. Employers will need to make contributions toward wages (10% in July and 20% in August), but the hope is that the vaccine will have reduced risks so that come October things will be back to normal
2. Support for the self-employed to be extended until September – the Self-Employed Income Support Scheme (SEISS) will continue to pay up 80% of the last three months’ profits, up to a maximum of £7,500. From tradesman to hairdressers, this is a big help
3. Minimum wage to increase to £8.91 an hour – controversial for some business owners who fear this will exert cost pressures come October, it will help the lowest paid in our society
4. Stamp duty holiday extended to June – a buoyant housing market helps many SMEs as people look to get work done in advance of sale or once they have taken possession. The market has been sluggish in 2021 owing to lockdown, but as things free up come April so we should see an explosion of transactions and business
5. Economy forecast to rebound in 2021 – he’s projected annual growth of 4% this year and 7.3% next year. This means we are set for a ‘V-shaped’ recession – short and sharp – and while there are tax rises in 2023, businesses can look forward to better times in the second half of 2021 and into 2022
So, while we aren’t out of the woods just yet, the trees are thinning. Come April businesses such as salons, pubs and cafes can re-open as we get back to normal so Spring could be a time of rejuvination.
Like Some Small Business Insurance Help?
If you’d like some help protecting your business or would like some advice on the steps you need to take ahead of April, then please contact your local Coversure office.