Fylde coast welcome for Chancellor's Budget measures
The Chancellor’s business first budget has received a cautious welcome across the Fylde coast, with its continued aid for firms shut under lockdown restrictions and extension of the furlough scheme.
Rishi Sunak’s support measures were greeted with a sigh of relief in many sectors pleased to have some clarity so they can now plan ahead for the crucial summer period.
The hard hit hospitality and tourism sector will get to keep the lowered rate of VAT, five per cent, until September 30 and from then it will rise to 12.5 per cent until April next year.
The sector was given an added bonus when the Chancellor announced that planned beer, wine and spirits duty rises were to be shelved along with a planned rise in fuel duty for
motorists.For workers suffering throughout the pandemic’s lockdowns, the furlough scheme will be extended until September, paying up to 80 per cent of people’s wages but employers will be asked to pay an extra 10 per cent from July and 20 per cent from August.
The £20 a week uplift to Universal credit will also continue for the unemployed and low paid.
Income Tax, National insurance and VAT rates will not go up, but future rises in tax thresholds will be frozen after next year’s rise to £12,570.
The stamp duty holiday to support the housing sector will be continued at the nil to pay rate until the end of June, when it will be tapered off, with stamp duty being paid on houses worth £250,000 until September when it reverts to normal.
There will also be 95 per cent mortgages for first time buyers.
Contactless card payments will be raised again up to £100.
For businesses there was some added joy with the announcement that the 100 per cent coronavirus business rates holiday will continue for another three months until the end of June.
It will then rise to two thirds discount until the end of the year.
But supermarkets Asda and Morrisons have already said they will continue to pay its business rates bill in full during 2021-22 and will not accept the offer of rates relief from the Chancellor.
The Government will back loans of up to £10m for companies that need support until the end of the year as its original Covid-19 lending schemes run out.
Mr Sunak said: “Businesses of any size can apply for loans from £25,000 up to £10m, through to the end of this year.”
And he announced a “new restart grant” will be provided in April to help businesses reopen.
He told MPs: “Non-essential retail businesses will open first, so they’ll receive grants of up to £6,000 per premises.
“Hospitality and leisure businesses, including personal care and gyms, will open later, or be more impacted by restrictions when they do, so we’ll give them grants of up to £18,000.”
Mr Sunak said the support for self-employed workers will also continue until September, with the fourth grant providing three months of support at 80 per cent of average trading profits.
More self employed people could qualify for aid if they have filled in their tax returns on time this year, but no help was announced for struggling directors of small companies who pay themselves out of dividends instead of a salary.
To help pay off the huge £589bn debt accrued over the pandemic period, he said the rate of corporation tax paid on company profits will increase to 25 per cent in 2023 businesses with profits of £250,000 or greater with a taper for smaller businesses and the chance to offset losses. But to encourage businesses to invest in the future and create jobs he unveiled a “super deduction” scheme, where investments can reduce their tax bill by up to 130 per cent of the cost.
Also announced were £5bn to help high street firms reopen; £408m for museums, theatres and galleries; £150m to help communities take over pubs in danger of closing and a £300m summer sports recovery package.
Another £1bn has been allocated to create another 45 Town Deals and eight “freeport” are to be established around the UK.
Paul Maynard, Conservative MP for Blackpool North and Cleveleys, said: “This is a budget based very much on supporting people and businesses in the short term so they can play their part in our longer-term recovery.
“I welcome the inclusion of many measures for which I myself have lobbied hard, including the extension of Self Employed Income Support to the newly-self-employed, which has become something of a personal campaign. The vital support this, alongside an extended furlough scheme and the retention of the Universal Credit uplift, will provide over the coming months is crucial.
“Ongoing help for our tourism and hospitality sector is of equal importance and I know many in Blackpool North and Cleveleys will welcome the extension of the 100 per cent business rate relief and the five per cent rate of VAT. The Chancellor has made sure there is no cliff edge for businesses, offering discounted rates moving forward.
“I have long called for sector specific support and am pleased to see this acknowledged in the Restart Grant scheme which will provide funding of up to £18,000 for the hospitality industry, as well as gyms, leisure operators and importantly, personal care businesses.
"Alongside a £700m investment in arts, culture and sport and a new Government-backed recovery loan scheme, the investment announced today will make a difference, protecting and creating jobs.”
Fylde MP Mark Menzies said: “I’m very pleased to see the steps the Chancellor has announced to support employees and businesses – and especially the help to protect the tourism sector which is so important here in Fylde.
“I lobbied the Chancellor for more help for our restaurants, hotels, cafes and pubs and the continuation of a five per cent VAT rate until the end of September, with a gradual increase back to normal levels along with business restart grants will, I am sure, be a real help.
“Hospitality firms and gyms will also be eligible for up to £18,000 to help them get back open as we emerge from lockdown, and retailers can get up to £6,000. The extension of furlough will help keep people in jobs until businesses can fully reopen."
Rachel McQueen, chief executive of Marketing Lancashire, inset, was pleased with many of the Budget measures which would help the hospitality and tourism sector locally.
She said: “We really welcome the support that has been announced in today’s budget, particularly that aimed directly at the tourism and hospitality industry, and we look forward to seeing the detail of the additional grant funding to support their re-opening.
“Plus of course we welcome the extension of furlough, reduced VAT and business rates that we have collectively been calling for.”
Craig Aikman, head of property for Lancashire law firm Vincents Solicitors, welcomed the announcements in today’s budget as a major boost for the housing market.
He said the extension to the existing Stamp Duty holiday to the end of June (which removes sales tax for properties under £500,000) would help those already in the process of purchasing.
Crucially, the additional extension for homes under £250,000 until September would benefit most homebuyers across the Lancashire and the Fylde Coast over the next six months.
He said: “The Stamp Duty extension is a welcome move for homebuyers who were likely to miss out on the March 31 deadline, and will ease the worries of those fearing a hefty tax bill if their sale is delayed over the next few weeks.
“The saving grace is the opportunity for buyers of properties under £250,000 to continue to benefit from zero per cent tax until the end of September. This is a smart move from the chancellor as it supports this key, active part of the market.
“The chancellor’s support for the lower end of the market, and first time buyers in particular, continues with the new Mortgage Guarantee scheme which will assist those with small deposits to buy a home. It was good to hear that most of the main high street lenders have already indicated they will offer 95 per cent mortgages under the scheme.”
Tony Medcalf, tax partner at Blackpool-based chartered accountants and business advisers MHA Moore and Smalley, said: “Today’s budget will provide a much-needed shot in the arm for the UK economy through a range of measures aimed at getting firms in all sectors back on their feet quickly and promoting economic recovery through business growth.
“The extension of the furlough scheme will provide a safety net to employers over the coming months, particularly those in the hospitality industry who will be unable to trade fully before May 17 at the earliest. This, along with the £5bn restart grants and continued reductions to VAT, will help retail, hospitality and personal care firms to recover as the lockdown is eased.
“While corporation tax will be increased to 25 per cent for many businesses, this higher rate remains relatively low among G7 countries and will not take effect until 2023.