Getty/ipopba
04 March 2021
Organisations and businesses across the optical industry have welcomed measures set out in the Chancellor of the Exchequer’s Spring Budget, but have also highlighted concerns over gaps in support and potential challenges ahead.
Optometry professionals have suggested the extension of the Coronavirus Job Support Scheme (furlough) and the self-employment income support scheme (SEISS), in particular, offer a sense of relief for many.
However, caps on the SEISS grant still mean that groups of self-employed individuals, particularly company directors and those earning above the £50,000 threshold, are unable to access the support.
Revealing the new Budget, the Chancellor reflected on the introduction of COVID-19 support measures this time last year, commenting: “What was originally thought to be a temporary disruption to our way of life, has fundamentally altered it.”
The Chancellor outlined the damage COVID-19 has caused to the economy since last March, as over 700,000 people have lost their jobs and the economy has shrunk by a record 10%. The country’s borrowing is also the highest it has been in peacetime.
“It is going to take the country, and the world, a long time to recover from this extraordinary economic situation,” the Chancellor said.
Through the Budget, the Chancellor set out a plan that, as well as extending measures to support businesses and individuals through the pandemic, would outline steps for the recovery of public finances and “begin the work of building the future economy.”
Furloughed employees will see no change to the terms and will continue to receive 80% of their wages through the scheme. As the scheme is wound down, employers will be asked to contribute, beginning with a 10% contribution in July, and 20% in August and September.
AOP policy director, Tony Stafford, welcomed the extension to the furlough scheme, commenting: “This may aid some optical practices that are still seeing a downturn in patient footfall because of pandemic restrictions.”
Practice owner, AOP board member and past chairman, Kevin Thompson, shared his experience of the scheme. He told OT: “The extension of the furlough scheme is a welcome cushion for those of us with around 75% of our staff still partially furloughed to various extents based on business demands and individual personal vulnerabilities.”
Mr Thompson said that the business has tried to bring staff back “to some degree,” explaining: “Their mental health, after being off work for such a long time for some, is of concern to me.
The Hakim Group also welcomed the Chancellor’s extension to the furlough scheme, suggesting it would give employers the confidence “to take bold steps and plan for the next phase.”
Luke Wren, head of business development for the Hakim Group said: “We can now, with confidence, put plans into place knowing that furlough is still there, in case we need to flex up or down with our workforce, because none of us know whether this opening up is going to stutter, whether there are going to be variants that might hamper progress or periodic outbreaks.”
Mr Wren added that the business remains “cautiously optimistic,” noting “we cannot be certain whether the demand on the High Street is going to ramp up as we have been expecting.”
He welcomed the tapered reduction to the scheme as enabling the company to take steps forward, whilst knowing that, if the roadmap out of lockdown was to reach a hurdle “we’ve got some buffer built into the plans.”
The fifth grant, which the Chancellor said would be the final grant, will be available from July for those most affected by the pandemic. Individuals who have seen turnover fall by more than 30% will continue to receive the full 80% grant, while those whose turnover has fallen by less will receive a 30% grant.
For the first time, the scheme will be expanded to include individuals who entered self-employment in 2019–20. The Government has suggested this could benefit 600,000 more people who filed a tax return in this period.
Responding to the announcement, the AOP’s Mr Stafford commented: “While help should have come sooner for those who became self-employed during 2019–20, we are pleased to see those individuals now eligible for financial support, and expect this will help some of our locum members, including those recently qualified.”
Mr Stafford continued: “It looks as though some of the other gaps in the support for self-employed people that we have previously called to be filled – such as those earning above the ceiling for support, and those whose income is in the form of dividends – haven’t been fixed, so we’ll be looking carefully at the detail and continuing to press for fair treatment for all our self-employed members.”
Commenting on the announcement, Derek Cribb, CEO of the Association of Independent Professionals and the Self-Employed, said: “After almost a year, this support will be a tremendous relief to hundreds of thousands of self-employed people who could not access SEISS because they had not yet filed a full tax return.”
However, the group has urged the Chancellor not to forget those excluded from support.
The Federation of Small Businesses (FSB) also welcomed the extension, but shared: “Company directors will be extremely disappointed to see that they have been left out in the cold yet again,” adding that “there is still time to fix this entirely solvable gap in the business support landscape.”
To help businesses reopen, the Government announced plans to introduce new Restart Grants in April for hospitality, accommodation, leisure, personal care and gym businesses in England.
As the Bounce Back and Coronavirus Business Interruption Loan programmes both come to an end, the Government is introducing a new UK-wide Recovery Loan Scheme.
Businesses of any size will be able to apply for a loan between £25,000 and £10 million to the end of the year. The Government will provide a guarantee to lenders of 80%.
The Government is also extending the loss carry-back rules worth up to £760,000 per company.
Discussing the need to “unlock investment,” as part of plans to rebuild after the pandemic, the Chancellor announced a new two-year ‘super-deduction’ that will begin in April 2021 and will cut companies’ tax bills by 25p for every pound they invest in new equipment.
The Chancellor suggested that through this scheme, when companies invest, they can reduce their taxable profits by 130% of the cost.
Aiming to particularly support small and medium-sized businesses, the Chancellor also announced the launch of new UK-wide Help to Grow schemes, which will provide training and resources to develop management and digital skills. These programmes will be set to begin by autumn, with businesses able to register online.
Commenting on the measures, Mr Thompson suggested: “It is an unprecedented budget for unprecedented times, with a basket of initiatives to help restart businesses and encourage re-investment.”
The ‘super deduction’ scheme could look particularly attractive for practice owners wishing to invest in their commercial futures, Mr Thompson suggested, adding that “it is a good time for businesses to look at reinvesting, so long as they have the cash to do so.”
However, Mr Thompson noted that, “with rates currently so low and risks high, it will be interesting to see what the actual appetite to lend will be, even with the 80% guarantee.”
He explained: “With so much support available, lending institutions are quite rightly questioning the sustainability of businesses beyond the end of furlough and we are finding that we are having to be much more robust in our projections to justify overdrafts and loan reviews and to show how we will continue to thrive once these sorts of benefits end.
“For us, a crucial part of this is moving to variable contracts for staff which we have been focusing heavily on, to give us flexibility in the future should localised health scares or lockdowns still occur post-furlough,” Mr Thompson added.
The Government plans to extend the temporary rates relief for eligible hospitality, retail and leisure businesses until the end of June, which will then continue through the year at discounted level.
While in spring last year, the Government announced plans for a rates review, this was delayed during 2020, with media reports suggesting the final report from the review has been pushed back until the autumn.
The Chancellor also confirmed that the National Living Wage will be increased to £8.91 from April. Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay costs per employee from the Government.
Aiming to support new jobs, the Chancellor announced that the Government will be doubling incentive payments to businesses to up to £3000 for all new apprentice hires of any age.
Commenting on the discussion of business rates, the Hakim Group’s Mr Wren noted: “Business rates relief, whilst welcome, needs a fundamental overhaul if we are to make something that is, in essence, a tax on the High Street fit for purpose, as well as being competitive when compared to online businesses.”
Responding to the Budget, Danny Mortimer, chief executive of the NHS Confederation, noted that this funding would be welcome news for NHS leaders and primary care professionals, but added: “We would do well to remember that this only forms a small part of a tangible recovery plan for the health service.”
Highlighting “huge concerns” around the Budget, the chief executive argued that health services “will feel…left out in the cold.”
Previous funding announced in the autumn Spending Review “fell far short of the £10 billion investment in the NHS recommended by the Health Foundation,” Mr Mortimer said. He suggested that the Budget has “missed the real opportunity to go further and faster to address the significant and pressing investment needed to tackle the gaping holes in provision in capital, social care, in public health and in workforce training and education spending.”
OT endeavours to keep the most up-to-date news on our website and this information was correct when published. However, the situation regarding COVID-19 is rapidly evolving. Please check OT’s homepage for the latest news and guidance on COVID-19.
Optometry professionals have suggested the extension of the Coronavirus Job Support Scheme (furlough) and the self-employment income support scheme (SEISS), in particular, offer a sense of relief for many.
However, caps on the SEISS grant still mean that groups of self-employed individuals, particularly company directors and those earning above the £50,000 threshold, are unable to access the support.
Revealing the new Budget, the Chancellor reflected on the introduction of COVID-19 support measures this time last year, commenting: “What was originally thought to be a temporary disruption to our way of life, has fundamentally altered it.”
The Chancellor outlined the damage COVID-19 has caused to the economy since last March, as over 700,000 people have lost their jobs and the economy has shrunk by a record 10%. The country’s borrowing is also the highest it has been in peacetime.
“It is going to take the country, and the world, a long time to recover from this extraordinary economic situation,” the Chancellor said.
Through the Budget, the Chancellor set out a plan that, as well as extending measures to support businesses and individuals through the pandemic, would outline steps for the recovery of public finances and “begin the work of building the future economy.”
The furlough scheme extended until September
Key to the announcement, is an extension to the furlough scheme until the end of September.Furloughed employees will see no change to the terms and will continue to receive 80% of their wages through the scheme. As the scheme is wound down, employers will be asked to contribute, beginning with a 10% contribution in July, and 20% in August and September.
AOP policy director, Tony Stafford, welcomed the extension to the furlough scheme, commenting: “This may aid some optical practices that are still seeing a downturn in patient footfall because of pandemic restrictions.”
Practice owner, AOP board member and past chairman, Kevin Thompson, shared his experience of the scheme. He told OT: “The extension of the furlough scheme is a welcome cushion for those of us with around 75% of our staff still partially furloughed to various extents based on business demands and individual personal vulnerabilities.”
Mr Thompson said that the business has tried to bring staff back “to some degree,” explaining: “Their mental health, after being off work for such a long time for some, is of concern to me.
The Hakim Group also welcomed the Chancellor’s extension to the furlough scheme, suggesting it would give employers the confidence “to take bold steps and plan for the next phase.”
Luke Wren, head of business development for the Hakim Group said: “We can now, with confidence, put plans into place knowing that furlough is still there, in case we need to flex up or down with our workforce, because none of us know whether this opening up is going to stutter, whether there are going to be variants that might hamper progress or periodic outbreaks.”
Mr Wren added that the business remains “cautiously optimistic,” noting “we cannot be certain whether the demand on the High Street is going to ramp up as we have been expecting.”
He welcomed the tapered reduction to the scheme as enabling the company to take steps forward, whilst knowing that, if the roadmap out of lockdown was to reach a hurdle “we’ve got some buffer built into the plans.”
Self-employment income support scheme extended and expanded
SEISS will also continue until September. A fourth grant will be made available for the period between February and the end of April covering 80% of average trading profits.The fifth grant, which the Chancellor said would be the final grant, will be available from July for those most affected by the pandemic. Individuals who have seen turnover fall by more than 30% will continue to receive the full 80% grant, while those whose turnover has fallen by less will receive a 30% grant.
For the first time, the scheme will be expanded to include individuals who entered self-employment in 2019–20. The Government has suggested this could benefit 600,000 more people who filed a tax return in this period.
Responding to the announcement, the AOP’s Mr Stafford commented: “While help should have come sooner for those who became self-employed during 2019–20, we are pleased to see those individuals now eligible for financial support, and expect this will help some of our locum members, including those recently qualified.”
Mr Stafford continued: “It looks as though some of the other gaps in the support for self-employed people that we have previously called to be filled – such as those earning above the ceiling for support, and those whose income is in the form of dividends – haven’t been fixed, so we’ll be looking carefully at the detail and continuing to press for fair treatment for all our self-employed members.”
Commenting on the announcement, Derek Cribb, CEO of the Association of Independent Professionals and the Self-Employed, said: “After almost a year, this support will be a tremendous relief to hundreds of thousands of self-employed people who could not access SEISS because they had not yet filed a full tax return.”
However, the group has urged the Chancellor not to forget those excluded from support.
The Federation of Small Businesses (FSB) also welcomed the extension, but shared: “Company directors will be extremely disappointed to see that they have been left out in the cold yet again,” adding that “there is still time to fix this entirely solvable gap in the business support landscape.”
Business support
The Chancellor confirmed a number of new loan schemes to support businesses as restrictions ease, whilst existing schemes wind down.To help businesses reopen, the Government announced plans to introduce new Restart Grants in April for hospitality, accommodation, leisure, personal care and gym businesses in England.
As the Bounce Back and Coronavirus Business Interruption Loan programmes both come to an end, the Government is introducing a new UK-wide Recovery Loan Scheme.
Businesses of any size will be able to apply for a loan between £25,000 and £10 million to the end of the year. The Government will provide a guarantee to lenders of 80%.
The Government is also extending the loss carry-back rules worth up to £760,000 per company.
Discussing the need to “unlock investment,” as part of plans to rebuild after the pandemic, the Chancellor announced a new two-year ‘super-deduction’ that will begin in April 2021 and will cut companies’ tax bills by 25p for every pound they invest in new equipment.
The Chancellor suggested that through this scheme, when companies invest, they can reduce their taxable profits by 130% of the cost.
Aiming to particularly support small and medium-sized businesses, the Chancellor also announced the launch of new UK-wide Help to Grow schemes, which will provide training and resources to develop management and digital skills. These programmes will be set to begin by autumn, with businesses able to register online.
Commenting on the measures, Mr Thompson suggested: “It is an unprecedented budget for unprecedented times, with a basket of initiatives to help restart businesses and encourage re-investment.”
The ‘super deduction’ scheme could look particularly attractive for practice owners wishing to invest in their commercial futures, Mr Thompson suggested, adding that “it is a good time for businesses to look at reinvesting, so long as they have the cash to do so.”
However, Mr Thompson noted that, “with rates currently so low and risks high, it will be interesting to see what the actual appetite to lend will be, even with the 80% guarantee.”
He explained: “With so much support available, lending institutions are quite rightly questioning the sustainability of businesses beyond the end of furlough and we are finding that we are having to be much more robust in our projections to justify overdrafts and loan reviews and to show how we will continue to thrive once these sorts of benefits end.
“For us, a crucial part of this is moving to variable contracts for staff which we have been focusing heavily on, to give us flexibility in the future should localised health scares or lockdowns still occur post-furlough,” Mr Thompson added.
The Government plans to extend the temporary rates relief for eligible hospitality, retail and leisure businesses until the end of June, which will then continue through the year at discounted level.
While in spring last year, the Government announced plans for a rates review, this was delayed during 2020, with media reports suggesting the final report from the review has been pushed back until the autumn.
The Chancellor also confirmed that the National Living Wage will be increased to £8.91 from April. Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay costs per employee from the Government.
Aiming to support new jobs, the Chancellor announced that the Government will be doubling incentive payments to businesses to up to £3000 for all new apprentice hires of any age.
Commenting on the discussion of business rates, the Hakim Group’s Mr Wren noted: “Business rates relief, whilst welcome, needs a fundamental overhaul if we are to make something that is, in essence, a tax on the High Street fit for purpose, as well as being competitive when compared to online businesses.”
Healthcare and the COVID-19 vaccine
As part of the Budget announcement, the Chancellor shared that an extra £1.65 billion investment will be made available to support the COVID-19 vaccination roll-out. Funding will be provided for activities such as vaccine testing and support for clinical trials, as well as studies to test the effectiveness of combinations of different COVID-19 vaccines, and assessing the effectiveness of a third dose.Responding to the Budget, Danny Mortimer, chief executive of the NHS Confederation, noted that this funding would be welcome news for NHS leaders and primary care professionals, but added: “We would do well to remember that this only forms a small part of a tangible recovery plan for the health service.”
Highlighting “huge concerns” around the Budget, the chief executive argued that health services “will feel…left out in the cold.”
Previous funding announced in the autumn Spending Review “fell far short of the £10 billion investment in the NHS recommended by the Health Foundation,” Mr Mortimer said. He suggested that the Budget has “missed the real opportunity to go further and faster to address the significant and pressing investment needed to tackle the gaping holes in provision in capital, social care, in public health and in workforce training and education spending.”
The road to recovery
With the country’s borrowing at a record level, the Chancellor announced two measures to begin to manage the build-up of the country’s debt, “fix” public finances and support the path to recovery.
The Chancellor announced he would freeze personal tax thresholds and the Higher Rate threshold from April 2022 until April 2026. Inheritance tax thresholds, the pensions lifetime allowance and annual exempt amount in capital gains tax will be maintained at their current levels until April 2026.
To contribute to the recovery of public finances, the 2023 rate of corporation tax paid on company profits will be increased to 25%.
Businesses with profits of £50,000 of less, will be taxed at 19%. A taper above this benchmark will also be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
Commenting on the announcement, Mr Wren suggested that the corporation tax was “inevitable,” adding: “Most business owners had reluctantly accepted that there would need to be an increase in taxes given the scale of support we have received from the Chancellor.”
“It is encouraging that this does not kick in till 2023 whilst we all build back post-COVID,” he continued.
Reflecting on the measures, the FSB’s national chairman, Mike Cherry, suggested that reintroduction of a small business corporation tax rate with a taper “is good to see,” but emphasised that this taper must be at a reasonable level.
Mr Cherry also noted: “A lot will hinge on the tax announcements due later in March, and the much-needed, delayed downward review of business rates.”
OT endeavours to keep the most up-to-date news on our website and this information was correct when published. However, the situation regarding COVID-19 is rapidly evolving. Please check OT’s homepage for the latest news and guidance on COVID-19.
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