RECOVERY LOAN SCHEME TO BE RELAUNCHED

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The Recovery Loan Scheme (RLS) will be relaunched during August 2022 as the government aims to continue supporting recovering small businesses.

The RLS launched in April 2021 and was originally scheduled to run until 31 December 2021.

At Autumn Budget 2021, the government extended the scheme by six months to 30 June 2022 and made some adjustments to its terms. The government provided a guarantee of 80% for loans made before 1 January 2022 and 70% for loans after that date. The borrower remains 100% liable for the debt.

According to the British Business Bank, accredited lenders have offered over £4.5 billion, through the RLS, to smaller UK businesses as they steer a path towards a sustainable recovery.

The relaunched RLS will support facility sizes of up to £2 million for borrowers outside the scope of the Northern Ireland Protocol, and up to £1 million for those in scope of the Northern Ireland Protocol.

The scheme will be open to smaller businesses with a turnover of up to £45 million.

Catherine Lewis La Torre, CEO, British Business Bank, said:

‘The British Business Bank is committed to supporting smaller businesses in accessing the finance they need to grow sustainably. Thousands of businesses in all sectors and from right across the UK have taken out loans under the RLS. This will better position them to confront both the challenges and opportunities that are ahead.’

Internet link: British Business Bank website

IOD CALLS FOR EXTENSION OF CAPITAL ALLOWANCES SUPER-DEDUCTION

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he Institute of Directors (IoD) has called on the government to extend the capital allowances super-deduction.

Data published by the IoD found that the super-deduction has had ‘a positive and measurable impact’ since it was introduced at Budget 2021. The data showed that 13% of firms reported that the super-deduction had had a direct impact on their level of investment undertaken between 2021and 2023. For half of these businesses, it was entirely new investment as a direct result of the super-deduction.

Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant and machinery will benefit from new first year capital allowances.

Under this measure a company will be allowed to claim:

  • a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
  • a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances.

The relief is not available for unincorporated businesses.

The business group is urging the government to make the super-deduction permanent.

Kitty Ussher, Chief Economist at the IoD, said:

‘Our data shows the positive impact the super-deduction has already had in doing just that. We are therefore calling for the Chancellor to make it a permanent feature of doing business in Britain.

‘It is wrong to look at declining overall levels of business investment in recent months and conclude that the super-deduction has not worked. Instead, our data shows that even less investment would have taken place if the super-deduction did not exist.’

Internet link: IoD website

NATIONAL INSURANCE THRESHOLD RISES

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The level at which people start paying national insurance rose from £9,880 to £12,570 from 6 July.

According to the government, 30 million people across the UK will benefit from this tax cut. It says the increase will lift 2.2 million people out of paying any personal tax.

The threshold change means that 70% of UK workers will pay less national insurance, even after accounting for the Health and Social Care Levy, the government added.

Prime Minister Boris Johnson said:

‘We know it’s tough for many families across the UK, but we want you to know that this government is on your side.

‘Today’s tax cut means around 70% of British workers will pay less national insurance – even after accounting for the Health and Social Care Levy that is funding the biggest catch-up programme in NHS history and putting an end to spiralling social care costs.

‘So whether you are a receptionist, work in hospitality or are a delivery driver, this tax cut is likely to make you and your family better off.’

Internet links: HM Treasury press release