Hospitality and tourism sectors were thrown a lifeline in the Budget with the extension of the temporary reduction in VAT.
For businesses in these industries, VAT will remain at 5 per cent until 30 September, then increase to 12.5 per cent until 31 March 2022, before returning to the standard rate (currently 20 per cent).
The Chancellor also announced a new Recovery Loan Scheme, which will launch on 6 April – the start of the new tax year – as a replacement for the Bounce Back Loan Scheme, which has closed.
The Recovery Loan Scheme is due to run until 31 December, and aims to help businesses affected by Covid.
The loan can be used for any legitimate business purpose, including managing cashflow, investment and growth. It is designed to appeal to businesses that can afford additional debt finance.
The maximum value of a facility provided under the scheme will be £10m per business. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
There will be no turnover restriction for businesses accessing the scheme. Businesses will be able to choose from a variety of products: term loans, overdrafts, asset finance and invoice finance facilities. Term loans and asset finance facilities are available for up to six years, with overdrafts and invoice finance available for up to three years.
Do you need help or advice with accessing Covid funding support for your business? Optimum accountants help owner managed businesses in Swindon, Wiltshire, Cheltenham, and Gloucestershire, and the surrounding counties. Please get in touch.