UK Budget 2021-22
Last week the UK Government provided details of the budget for 2021-2022. Given that many functions relating to sport and leisure are devolved to the Welsh Government, not all apply here in Wales. Here’s our rundown of key actions the UK Government has taken that will apply in Wales.
Furlough
The furlough scheme will be extended until the end of September.
In July, employers will be expected to contribute 10%, increasing to 20% in August and September, as the economy reopens. Employees will continue to receive 80% of their salary for hours not worked until the scheme ends.
For workers the terms will not change.
Living Wage
The rate of living wage has been increased by 2.2%
VAT
Will remain at 5% for leisure businesses until the end of September. It will then increase to 12.5% before resetting to 20% in April 2022.
Business Rates
The announcements by the Chancellor only apply in England. However, the Welsh Government has gone further and suspended business rates for the next year for businesses in the leisure sector.
Recovery Loan Scheme
A new Recovery Loan Scheme will 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.
Once received, the finance can be used for any legitimate business purpose, including growth and investment.
The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.
What type of finance is available:
· Term loans and overdrafts will be available between £25,001 and £10 million per business.
· Invoice finance and asset finance will be available between £1,000 and £10 million per business.
Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security. This is available to businesses in Wales and you can find more details here.
Welsh Government Economic Resilience Fund
Finally, Welsh Government have announced another round of funding under the Economic Resilience Fund of Covid grants for businesses in the Tourism, Hospitality and Leisure sectors. Details here.
