April 2021

I n what is likely to be viewed as one of the most significant Budgets of the last few years, possibly in a generation, on 3 March Chancellor of the Exchequer Rishi Sunak unveiled his plan to help kickstart the economy. Extension The garage sector has been able to continue to operate through the pandemic, and thanks to the MOT Exemption was busier than usual in the second half of 2020 and the first few months of 2021. However, challenges remain. The Chancellor’s first announcement in the Budget was the further extension of the furlough up to the end of September. The scheme had been due to wind up on 30 April. For those receiving it, terms remain the same at 80% of their usual monthly salary, but government funding will progressively reduce. Businesses will then be expected to provide the balance, contributing 10% of the total in August, and 20% through September. Support for the self-employed is also running through until the end of September now, with a fourth grant to cover February to April providing 80% of average trading profits, followed by a fifth grant for May onwards. Claims will be able to be made for this period from late July. Support will from the summer be targeted towards those whose profits have fallen by 30% or more, who would receive 80% of the average as before. Meanwhile, those whose profits have fallen by less than 30% will receive a 30% grant. Support will be widened to include those who were previously not covered, meaning those who became self-employed in 2020 will be eligible for the fourth and fifth tax returns. Meanwhile, many businesses have been relying on Bounce Back loans and other schemes to keep operating. These expire at the end of March, and the Chancellor announced that these would be replaced with Re-Start grants from April. These will be targeted at non-essential retail initially, which will be eligible for £6,000 per premises. Hospitality and personal leisure businesses would be next, and able to receive £18,000. Recovery Loans will also be available to any business. They will be able to apply for between £25,000 and £10m until the close of 2021, with the government providing a 80% guarantee to lenders. Training and tax On the training front, for businesses looking to take on apprentices, government incentives were doubled to £3,000 which would apply to all new apprentices of any age. However, unspent funding will after two years still be redrawn by government via the Apprenticeship Levy clawback mechanism. On business rates, the 100% holiday will be continued for the first three months of the financial year, through until the end of June. For the rest of the year, business rates will be discounted by two thirds, up to a maximum £2m for closed businesses, with a lower threshold for those who have been able to continue trading through the pandemic. At the same time, the reduced rate of VAT will continue until the end of September. For the subsequent six months it will go up to 12.5%, and not return to the 8 AFTERMARKET APRIL 2021 BIG ISSUE www.aftermarketonline.net BUDGET 2021: AUTOMOTIVE SECTOR REACTS After a rollercoaster year resulting from COVID-19, the automotive sector responded to Chancellor Rishi Sunak’s choices on how to stimulate the economy This will be the biggest business tax cut in modern history ”