There are three areas of expense which will increase for businesses from 1 July 2021, irrespective of whether the business is able to open or not.
Many properties used for retail, hospitality, leisure or child nurseries were given a business rates holiday from 1 April 2020 to 30 June 2021. In England 34% of these business rates become payable for periods from 1 July 2021 to 31 March 2022, but this relief is capped at £105,000 per business.
In Wales the business rates relief is given at 100% for the whole of 2021/22 for retail, leisure, hospitality businesses and charities, where the rateable value of the property is less than £500,000.
In Scotland the 100% business rates relief for retail, hospitality and leisure businesses also finishes on 30 June 2021, check with the local authority for any further relief.
The Northern Irish Assembly has extended the business rates holiday to the entire 2021/22 year for properties used by businesses in these sectors: retail, hospitality, leisure, tourism, childcare and local newspapers. There is no monetary cap on this relief.
There has been no rent holiday during the pandemic, but landlords have not been permitted to evict tenants from commercial premises. This ban on evictions will remain in place until March 2022.
In addition, the existing debts of unpaid rent accumulated during the pandemic will be ring-fenced in order to protect struggling tenants. These rent areas will then go through a new arbitration process to help landlords and tenants resolve disputes over bad debts. Landlords are also unable to issue a winding-up petition to collect unpaid debts.
CJRS claims for periods from 1 July 2021 can only cover 70% of the employee’s usual wage capped at £2,187.50 per month, as adjusted in proportion to the number of hours on furlough in the month.
However, the employer must continue to pay 80% of the employee’s wage per month for furloughed periods, and all employer’s class 1 NIC and the minimum amount of employer’s contribution to the workplace pension.
The reduced rate of VAT of 5% for hospitality and tourism businesses will apply until 30 September 2021, when it will increase to 12.5% until 31 March 2022.
Written by the Tax Advice Network