The Chancellor of the Exchequer, Rishi Sunak, has revealed a £65 billion three-point plan to provide support for jobs and businesses.

Delivering the Budget in Parliament, the Chancellor said his immediate priority continues to be supporting those hardest hit, with extensions to furlough, self-employed support, business grants, loans and VAT cuts – bringing total fiscal support to more than £407 billion.

The key points of the Budget include:

  • An extension of the Coronavirus Job Support Scheme to September 2021 across the UK.
  • An extension of the UK-wide Self Employment Income Support scheme to September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.
  • Extension to the VAT cut to five per cent for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5 per cent rate for a further six months until 31 March 2022.
  • 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.
  • A new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.
  • £300 million for major spectator sports, supporting clubs and governing bodies in England as fans begin to return to stadia.
  • 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.
  • £2.8 million to support a UK and Ireland bid to host the 2030 World Cup.
  • £28 million to fund the Queen’s Platinum Jubilee celebrations in 2022, delivering a major celebration for the UK.
  • Income tax personal allowance and the higher rate threshold will rise next year as planned and will then be maintained at that level until April 2026.
  • The rate of Corporation Tax will increase to 25 per cent, but will not take effect until 2023. Businesses with profits of £50,000 or less, around 70 per cent of actively trading companies, will continue to be taxed at 19 per cent. A tapered rate will also be introduced for profits above £50,000, so that only businesses with profits of £250,000 or greater will be taxed at the full 25 per cent rate.

The Chancellor’s Budget statement has already raised reaction from industry professionals.

Paul Reed, CEO of the Association of Independent Festivals, said: “We warmly welcome the extension to the reduced VAT rate on tickets, which will really help festivals during the 2021 sales cycle. For many AIF members, this is the first period in which they are selling tickets since the outset of the pandemic. We do, however, reiterate the recommendation of the DCMS Select Committee for VAT on ticket sales to remain at a reduced rate for three years so that the UK festival sector can fully recover.

“The Culture Recovery Fund has been a lifeline for many of our members so it’s greatly encouraging to see a further £300 million invested into this, though we would appreciate some further detail on this additional round and the time period it will cover.

“We also welcome the extension to the Government’s furlough scheme and continued support for the self-employed. However, independent festival organisers would much rather mobilise their staff to plan a full and successful festival season this summer. As we have repeatedly stressed, the only way they can do this is with a Government-backed insurance scheme that covers COVID-19 related cancellation. The Chancellor today confirmed the extension of the Government-backed restart scheme for film and TV productions – a similar safety net needs to be put in place before the end of March to avoid mass cancellations throughout the UK’s festival market.”

Tom Clements, president of the National Outdoor Events Association (NOEA), said: “As an association we do welcome this Budget, specifically the extension of the furlough scheme to September 21. However, we continue to be concerned about the lack of event industry specific measures that are put in place. 

Event businesses are not able to gain rate relief, as we are not seen as the same as hospitality, equally the new Restart Loan that was mentioned will not be underwritten for our industry, and we have seen grants for other sectors of industry that are also not available to our own. Even the furlough scheme extension will not support those events that have already had to cancel this year and won’t be receiving any income until spring 2022. 

“Until the Government is able to put together specific packages for our sector – in the same way as it has done for others – we will continue to suffer as we have done over the last 12 months.” 

Michael Kill, CEO of the Night Time Industries Association (NTIA), said: “We welcome the extension of VAT and rates relief, and that more money is going to hospitality and the Culture Recovery Fund (CRF). But both of these interventions again reveal the Chancellor’s inability to comprehend the specific challenges faced by night time economy businesses, such as nightclubs, casinos and bars, many of which have been entirely unable to open during the pandemic and face higher costs relative to wider hospitality. With no meaningful expansion to CRF eligibility, and no bespoke support for our sector, we are once again left with a package totally incommensurate with businesses’ costs – including spiralling commercial rent arrears. The loan solutions outlined by the Chancellor just aren’t good enough for businesses that are already overburdened with debt.

“It is also welcome that furlough has been extended and SEISS expanded, but it’s unacceptable that the Chancellor continues to let down other freelance workers in our sector who have missed out on support to date. Surveys have revealed two thirds of nightlife freelancers have been unable to access support, and today’s expansion – while welcome – will only make a small dent in this figure.

“I am also disappointed that the Chancellor didn’t take this opportunity to introduce a Government-backed insurance scheme for events this summer. Our world-leading festivals are at the heart of the UK’s cultural life – but because of the announcement today, so many events will be needlessly cancelled, or postponed to 2022.

“While the roadmap announcement gave hope to our sector last week, the Chancellor is now at risk of snatching defeat from the jaws of victory. With the money spent on support to date, it is ridiculous that many nightlife businesses may now fall at the final hurdle. The blame for this unnecessary personal hardship, and damage to the wider economic recovery, will fall at the Chancellor’s feet, unless he acts to ensure that proportionate sector specific grant funding is available immediately for night time economy businesses.”

In a statement, the Business Visits and Events Partnership (BVEP), the umbrella body and advocacy group for the UK events sector, commented: “The BVEP welcomes the Chancellor’s additional business support but will need to understand how much of this will support event businesses through to their sustained recovery.

“The Chancellor has responded to the partnership’s ask for extensions to current business support through the announcements on the extension of the furlough scheme, support for the self-employed, the introduction of the Restart Grants and the extension of business rates relief and VAT.

“However, there’s a need to look more closely at the extent of these and other measures in so far as they apply to the Events Industry, including the additional funds allocated for the Cultural Recovery Fund.

“Previous announcements of similar measures have not always extended to event business and freelancers. Recent research shows delivering additional payments to businesses through local authorities has been slow and, in some cases, non-existent.

“Until the fine detail of the announcements becomes clear the Industry remains cautious in its appreciation of the impact on the measures in helping the Industry sustain its activities until the planned reopening in May and June.

“The reopening roadmap does not mean an instant recovery for the industry. As has been constantly emphasised events take months to plan and many will not return until well into the back end of 2021 and many more until 2022. On this basis event businesses will need more support than many other sectors of the economy, which can open reasonably immediately when permitted to do so.

“Furthermore, if social distancing and other non-pharmaceutical interventions are to remain, which impact capacities at events, this will significantly reduce profitability and be another burden on event businesses.

“Events have a pivotal role to play in the UK’s economic revival through business events showcasing Britain’s trade and knowledge to the world and cultural events bringing communities together.

“The BVEP will continue to press Government to recognise the specific plight of individual business in the recovery period and look for more targeted support.”

 

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