Finances 2021 and what it means for small companies
Originally written by Timothy Adler about small business
Rishi Sunak will extend vacation and other covid support to small businesses in next month’s 2021 budget on March 3rd.
The Chancellor will also almost certainly extend the current suspension of commercial tariffs for many small businesses while creating the conditions for an online sales tax that all retailers may have to pay later in the year.
In July, it was revealed that the Treasury Department was considering a 2 percent online sales tax to raise £ 2 billion a year, giving physical stores an advantage when making in-store purchases.
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Recent surveys by Kekst CNC found that online sales tax is the most popular way to recoup some of the costs of the Covid crisis: 56 percent of voters want online retailers to pay more tax.
One idea is that small businesses selling online could have their business rates offset against online sales tax, which gives a boost to high street businesses.
Meanwhile, 18 companies and organizations, including Waterstones, have asked Sunak to introduce a digital sales tax while lowering business rates.
Business rates are assessed every couple of years and based on rental levels from two years earlier. The result of the next evaluation is planned for 2023. The current rate is 50 percent of the market rent, Vivienne King, managing director of the Shopkeepers’ lobby group. The campaign, according to the Financial Times, made it the largest fixed cost paid by UK retailers.
A reduction in business rates would “level out” the competitive conditions between brick and mortar stores and online retailers, the undersigned said, as the coronavirus pandemic accelerates the already growing popularity of internet shopping.
> See also: Local authorities blame the government for the slow release of Covid-19 grants
Excluding groceries, the share of online retail sales rose from 31 to 46 percent last year, according to the British Retail Consortium and KPMG.
Online retailers are currently paying a lower tax rate than physical small businesses, which the signatories have asked Sunak to do as well.
According to the Sunday Times, the Chancellor will also present a series of guidelines aimed at highlighting “the benefits of Brexit”. The budget will be part of six days of announcements on the UK’s future after the Covid crisis.
Read on about Budget 2021 and Small Business
What support does the government offer for coronavirus companies?
Budget 2021 and what it means for small businesses