As Rishi Sunak unveils his crucial economic plan, Neil McLeese from BeyondHR explains how this will affect businesses.
There is no doubt that the latest budget announcement will be welcomed by businesses across the nation. As predicted the furlough scheme has been extended to the end of September. The scheme, in which the government pays up to 80% of employee wages, up to £2,500 will give many businesses the much-needed support to ensure business survival in the coming months.
With many businesses still unable to open for the foreseeable future, extending the scheme may allow them to avoid starting redundancy processes, an often complicated and costly procedure.
SMEs struggling to navigate the post-pandemic landscape will also welcome the extra breathing room to introduce new business practices and plan for the future as demand for their goods or services once the economy reopens remains unclear.
The government have made a public commitment to help support businesses as evidenced by the doubling of apprenticeship incentive payments from £1500 to £3000. This will provide a great opportunity for organisations to grow and develop their workforces. £126 million is to be invested in total, tripling the number of new traineeships whilst the introduction of a new “help to grow” scheme will offer smaller business management and digital training.
Businesses looking to invest will be further incentivised by the “super deduction” allowing them to deduct taxable income by 130% of the amount they invest.
While there is no denying that these measures are extremely helpful to businesses, national debt is set to peak at 97.1% of GDP in 2023-24 meaning we will have to pay for them going forward. The increase in corporation tax rates to 25% from April 2023 isn’t ideal but with sliding tax scale and measures like the “super deduction” this may be a small price to pay to save the economy.