2021 Budget

Today sees the release of the 2021 Budget. It is essentially a holding budget, one that will hopefully be the spring board for the next administration, as we transcend out of the Covid pandemic. But what does it mean for self employed and SMEs who make up up to 70% of our economy, will they agree with this good news treasury? After all will they agree that the covid business support back in April was rapid?

What does this budget mean for Self Employed and SMEs?

There is no change to the income tax personal allowance, and the high rate tax threshold. So sole traders or self employed need to be aware these figures are not changing when they pay their income tax on their earnings at year end.
NI contributions are remaining the same. And I recommend to Self Employed that those who haven’t already done so, make arrangements to pay their NI Class 2 monthly, in order to protect their ability to claim benefits in further locks down scenarios.
I am pleased to see the suggestion of a sovereign bond, which I advocated in my first official meeting with the Treasury Minister would bring additional revenue. To meet expenditure, the government have 2 options to either raise taxes or to issue bonds, the first being unpopular and unpalatable in the current economic climate the second is a prudent step I welcome to assist foot the bill of 200million pounds.
This is a holding budget, what I was hoping to see were initiatives to help support SMEs and their employees. Perhaps a similar initiative of an Employment Allowance which was introduced by the UK Government.
This allows each business to employ four full time employees on the National Living Wage without having to pay any employer NI Contributions over the year. This would boost the opportunity for investment from small businesses that can employ more staff and afford higher wages, putting more money back into the pockets of the people and narrowing the wage gap.
We need to keep the pressure on the UK government to maintain the VAT threshold and rates to support SMEs. If the VAT threshold was to drop, that would effect many many businesses forcing them to register and could have a huge impact on our SME structures. In essence more jobs losses could occur.

Welfare Benefits

We have to think about our current and immediate economic environment. More people are being made redundant in the banking and retails sectors. Because this budget sees minimal increases to the welfare benefits such as job seekers allowance and child welfare benefits, now is the time to support the most vulnerable in society. The lack of meaningful increase to benefits, is essentially a pay cut for those on low incomes or no incomes who are dependent on benefits. Rising costs, bills, cost of living puts pressure on many of my constituents, their families, and I am sure this is island wide. To interject here, this is exactly why we need to support the Gas Regulation Motion later. We have a responsibility to help else where if cannot assist in this area.
Furthermore we need to stimulate economic growth, create new jobs, so people are given a route out of the benefit system. This government needs to demonstrate a greater sense of urgency in delivering an economic strategy. The strengthening of our economy will have a positive impact on the wellbeing of our nation.

Pension Triple Lock - state pension rise 2.5%

I am pleased to hear the pension triple lock has been honored, one of the opportunities of a wealthy older population, means we can see an increase demand in areas ranging from care services, cleaning, gardening, redevelopment, education, and personal training. Servicing our aging population is is a long term opportunity for multiple markets sectors.