Budget Statement Summary: What are the Key Points for the Beauty Industry?

At today's Budget statement, Chancellor Rishi Sunak has set out his plans to boost the UK economy in the year 2021. In his plan he has outlined;

- Furlough will continue until September, with no change of terms. After July, businesses will be asked for a 10% contribution, rising to 20% in August and September.

- Support for the self-employed will also continue until September.

- There will be a new Restart Grant in April, "to help businesses reopen and get going again". non-essential retail businesses will receive grants of up to £6,000 per premises. More Restart Grant money will be available for any small business in hospitality, accommodation, leisure, personal care and gyms, which will reopen later and will be more affected by restrictions. They can receive up to £18,000, depending on their rateable value.

- Business rates holiday will be extended through to the end of June.

- On income tax, the threshold for paying the basic rate will rise to £12,570 next year. For higher-rate payers, the threshold will be £50,270. Both rates will stay the same until 2026.

- The VAT registration threshold will remain at £85,000 until 2024.

- Corporation tax will rise to 25% in 2023, but there will be a small profits rate created to ensure only businesses with profits over £250,000 will be taxed at the 25% rate (this equates to 10% of all companies). Businesses with profits under £50,000 will continue paying the 19% tax rate.

- Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.

- £7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.

- Additional £126 million for 40,000 more traineeships in England, funding high quality work placements and training for 16-24 year olds in 2021/22 academic year.

Overall, Rishi Sunak has announced £65 billion of additional spending to support businesses through the effects of the pandemic. But is it enough? The beauty industry still lacks sector-specific support, as one of the worst-hit industries, the beauty industry watches as alcohol and fuel duties are frozen while they only petition for a tax reduction to 5%. Reducing VAT to 5% would add £16,000 to the average VAT registered business, closing the cash gap by one-third. Without further government support, businesses expect to close their doors permanently by the end of the month. If 18% of the businesses which would have otherwise failed survive as a result of reducing VAT, then the policy pays for itself through the taxes they will pay.