Chancellor Rishi Sunak yesterday unveiled the government’s latest budget in a bid to steer the country out of lockdown and onto a road to recovery.
Rishi revealed that the government will be pumping an additional £65 billion into the economy to aid recovery.
Many were happy to hear that the furlough scheme will be extended until September with no change of any terms. However, after July, employers will be asked to make a 10% contribution, which will then rise to 20% in August and September.
Self-employed income support will also be extended until September, with 600,000 more being eligible for government help as the grants become more accessible.
Rishi announced that Corporation tax will rise to 25% but the increase has been delayed until April 2023 to allow businesses time to recover from the covid-19 pandemic.
However, firms making a profit of £50,000 or less will continue to pay the current 19% rate, while rates for businesses with profits more than this figure will be tapered.
Those who make annual profits of £250,000 or more will pay the full 25% rate when it is introduced.
Another highlight of the budget statement saw Rishi announce beginning in April 2021, a new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment, meaning they can reduce their taxable profits by 130% of the cost.
Read the full budget statement here
Industry Reaction
This morning we spoke to some leaders and members of the scaffolding and access industry on yesterday’s budget statement.
“Overall I think it was a good Budget delivered by the Chancellor given what are obviously exceptional times,” said Des Moore, TRAD Group CEO.
“Taxes, in general, had to rise but the 95% Mortgages available to everyone, not just first-time buyers will give confidence and a real boost to the housebuilding industry.
The introduction of Freeport’s nationally again will lead to real opportunities for investors which again can only be good news for the Construction Industry.
In general, overall, the initiatives do seem to confirm the governments is sincere in its leveling up agenda and their previous statement that we are going to Build Build Build our way out of the recession caused primarily by COVID,” he added.
Helen Gawor, Business Strategy Director at GKR Scaffolding Ltd gave her reaction: “The increase in Corporation Tax from 2023 to 25% for the 30% of businesses with higher profits is no surprise. Businesses will need to be prepared for this unphased increase which will hopefully be introduced at a time of greater stability in the construction market.
Optimistically, however, the message in this year’s budget is clearly an investment for economic growth. The tax breaks for investment, further support for funding of apprenticeships and traineeships, and the backing of regeneration projects will benefit our businesses and the construction industry in general.”
Matthew Cousins, Director of Apex Scaffolding (Exeter) Ltd and NASC Contracts Committee Chair said: “All in all, the budget was not as doom and gloom as many people feared, and on the face of it appears to support construction business and industry to survive to the end of the pandemic, come out fighting and help to grow the industry to where it was before COVID-19.
There is a slight bit of trepidation that the problems and borrowing are all being kicked down the road a bit, but hopefully things will have improved sufficiently by then that the sector will be robust enough to take it.”
CITB Policy Director Steve Radley said: “With the recovery from the crisis in sight, this welcome investment in infrastructure, traineeships and the new flexible apprenticeships, similar to our own shared apprenticeships scheme, will help support thousands of people into the construction industry just as employers are looking to hire them. Many employers reluctantly opted out of taking on an apprentice last autumn and extending the incentive to employ them is the right support at the right time.
“Extending traineeships will build stronger links with Further Education and build a bridge into apprenticeships and jobs for many young people. Our work with FE and employers on construction traineeships has demonstrated that both groups are committed to making this work.
“Government should build on this by quickly delivering on its pledge to help Apprenticeship Levy payers transfer their unspent funds to where they are needed, giving many smaller firms the firepower to drive the acceleration in apprenticeships to deliver the jobs-led growth the PM has promised.”
