Now that the dust has settled on the 2021 Spring Budget delivered by Chancellor Rishi Sunak, we are able to say with confidence that its contents provide a sensible plan for what is ahead. The team at Oscar Fairchild takes a look at what the Budget 2021 means for business owners.
Kim Red Wood-Lee, Managing Director of Oscar Fairchild, said “Chancellor Rishi Sunak vowed to ‘protect the jobs and livelihoods of the British people’, but we were pleased to see him go further and to think bigger as he prioritised support for businesses to help them grow and innovate.”
We consider The Budget to have given businesses the sensible approach needed, with a slow withdrawal of business support and no immediate increase in tax a smart move that comes as a blessed relief to many of our clients. Reopening of the country can continue with less panic about the jump to capacity that is unrealistic for many firms.
Kim continued, “There is a price to pay for the support businesses have been given, but we consider it do be a fair trade-off. The 130% capital expenditure relief is setting the right tone for accelerated innovation and investment and will help firms to continue to adapt, carve out new niches and establish strong USPs.”
“It is a huge relief to learn that The Office for Budget Responsibility (OBR) is forecasting the economy is set to rebound following the incredible vaccine rollout. Strong predictive figures point to us getting back to pre-pandemic peak levels by the middle of next year. It is through these tax incentives that business will be able to make confident investments and ignite the embers of recovery over the next two years.”
“The one area of concern for many clients is the uplift in Corporation Tax coming in 2023. It has been an incredibly difficult time for owner managers who had had the least financial support throughout the crisis. There has been no eligibility for self-employment grants and we’re now talking to clients who are genuinely very fearful that their gradual bounce back in profits will be sucked in to make up for the shortfall.”
Overall however, this is a good Budget for businesses. Our clients needed certainty; without this it was practically impossible to make good decisions. Now with the Spring 2021 Budget announced, businesses have a clear 12/24 month timeline and can create their own roadmaps for recovery and growth.
With the Chancellor’s Budget, and further Government support in mind, our advice to business owners is:
- Long term forward planning continues to be unrealistic. Consider the facts you have right now and make the right short & medium term decisions as best you can.
- Monitor your efficiencies and your cash flow. The here and now won’t be perfect, but you can ensure it’s the best it can be.
- You need to be ready for the future (even if you don’t know what it’ll look like right now). Stay agile and flexible, able to react quickly when opportunity arises.
About Oscar Fairchild: Oscar Fairchild (incorporating Redwood Clarke since 01.09.18) is an ACCA chartered and certified and AAT qualified accountancy, financial consultancy & bookkeeping practice with offices in The City of London, and Billericay, Essex. Offering a wide range of services including Self-Assessment Services, Annual Returns, VAT Returns, Credit Control, Payroll, Auto Enrolment Pension and Management Account services to high growth businesses and licensed London taxi drivers across London, Essex and Hertfordshire.