Trade bodies have broadly welcomed Chancellor Rishi Sunak's budget, particularly restart grants for shops and a furlough extension, but have warned more could be done to help the industry's self-employed workers and authors.
Speaking to the House of Commons on 3rd March, the Chancellor said he would continue to do “whatever it takes” to support businesses following a year which has seen 700,000 people lose their jobs and the economy shrink by 10%.
Sunak announced a widely trailed restart grants scheme that will see “non-essential” retailers such as bookshops eligible for £6,000 funding per premises in April.
The furlough scheme will also be extended until the end of September with no change to terms for employees. Businesses, however, will have to contribute 10% of furloughed workers' wages from July, rising to 20% in August and September.
He also confirmed the 100% business rates holiday will be extended until the end of June. For the remaining nine months of the financial year, rates will be reduced by two-thirds.
Laura McCormack, head of policy and public affairs at the Booksellers Association, said these measures were important but the business rates move did not go far enough. She said: “Booksellers will be relieved to have confirmation that the furlough scheme and help for the self-employed has been extended until September. The restart grants and extension of business rates relief are also welcome although the rates holiday extension falls short of the 12-month extension that the BA was calling for.
“We understand that in the long run the government will have to increase taxes to pay for the Covid measures. However, we are disappointed to see the government default to corporation tax without any consideration being given on how to tackle tax avoidance by tech giants and multinational companies who frequently move profits offshore in order to avoid paying their fair share.”
Under Sunak's plan, corporation tax will rise from 19% to 25% from April 2023, although companies with profits of less than £50,000 will still pay the current rate.
A fourth grant for the self-employed will also be made available covering February to April, with a fifth to follow covering May onwards. People whose turnover has fallen by 30% will continue to get the full grant covering 80% of trading profits for February to April, although those whose turnover has fallen by less than that will get a 30% grant.
Sunak also said a cash incentive scheme encouraging firms to take on apprentices would double to £3,000 and be extended for a further six months until September.
Stephen Lotinga, chief executive of the Publishers Association, commented: “This was an incredibly important budget for supporting the UK’s economic recovery and thankfully there was a lot from the Chancellor for our industry to welcome.
“The extended furlough scheme, incentives to hire apprentices and catch-up funding for schools are all really important measures for publishing as the industry returns to growth.
“It was great to see additional support for the high street was high up on the Chancellor's agenda, which should go some way to help booksellers across the country as they reopen. The expanded scheme for the self-employed will also hopefully provide some much needed additional relief to the many freelancers and authors who have struggled through this difficult time.”
Elsewhere in the budget, Sunak announced the reduced 5% VAT rate will be extended until the end of September while a “super deduction” tax break will also be introduced enabling firms to reduce their tax bill by 130% of what they they spend on investment.
With the Bounce Back Loan and Coronavirus Business Interruption Scheme coming to an end, the Treasury is launching a new recovery loan scheme for businesses that will run until the end of the year, making loans available of £25,000 to £10m.
Bridget Shine, c.e.o. of the Independent Publishers Guild, said: “At first glance this looks like a reasonable budget for small and medium sized businesses, with the caveat that the full effects are always in the small print. The extension of the furlough scheme until the end of September provides some welcome flexibility, and the continuation of the self-employment income support scheme is good news for the many people in publishing who work on a freelance and self-employed basis. The new recovery loan scheme could be useful, and the restart grants for retail businesses will hopefully help our many friends in independent bookselling get back on their feet from April.
“The tax measures appear to have less positive implications for employers and employees. Holding income tax and national insurance rates is sensible, but freezing personal tax thresholds will not help people in lower paid jobs. Raising corporation tax is never going to be popular, though tapering the increase should mean that smaller businesses will be less affected.
“It’s been a tumultuous 12 months for everyone in publishing, and we’ve been hugely impressed by the resilience and agility of IPG members. Publishing and SMEs will play a big part in the UK’s economic recovery this year and beyond, though clearly there are more challenges lying ahead for all businesses.”
The Authors' Licensing & Collecting Society (ALCS), meanwhile, welcomed some of the measures but warned individual freelances could miss out and the the government had ignored calls for an increase to the Public Lending Right pot and for the removal of VAT on audiobooks.
Sunak's changes to the Self-Employment Income Support Scheme (SEISS) allows those who were newly employed in 2019/2020 to claim. However, the ALCS said people who had “portfolio careers”, with income from a mix of different contracts and sources, could still fall through the cracks.
Although the ALCS also welcomed an extra £300m for a recovery fund for the arts, it pointed out little of the money had so far been allocated towards the literary field or writers.
Barbara Hayes, deputy c.e.o. of ALCS, commented: “We appreciate the extra boost in funding given to the Covid Recovery Fund. However, we are painfully aware that the Chancellor has not addressed the more pressing issues faced by our members and the wider pool of creative freelances, such as reforming SEISS eligibility criteria.
“We have consistently campaigned for an increase to the PLR fund over the past year, offering a reasonable and targeted way in which the government could offer support to authors who have been central to keeping the country entertained through books and programmes during the pandemic. We will continue to engage with the Treasury on these issues.”
The Society of Authors also said it was awaiting further detail on PLR and VAT on audiobooks, echoing concerns for self-employed authors.
SoA c.e.o. Nicola Solomon commented: “While we cautiously welcome the government’s extra funding for the arts, the Chancellor has failed to listen to arguments on closing most loopholes in the SEISS, with only newer freelances set to receive any meaningful help from the government after 12 months of uncertainty.
She added: “What is clear to us from our research last year is that the SEISS has failed to help anywhere close to the Chancellor’s target of 95% of self-employed workers, with his laudable aim of doing ‘whatever it takes’ to support to them in today’s budget bearing little or no resemblance to reality.
“Alongside such critical financial help, we also call on government to support the Authors’ Contingency Fund to enable us to continue providing financial support to authors in the greatest need.
“We are also asking the government to level up the UK’s Public Lending Right fund to reward authors when their books are borrowed from public libraries and ensure that we do not fall behind Germany and other industrialised economies.
“The government must also lead an improvement in educational funding so that teachers, parents and pupils can access more of the excellent materials provided by educational writers – and ensure they can be properly paid for their work – so they can continue to produce world-class learning materials.
“We also ask the Chancellor to tie off loose ends from last year’s budget and exempt audiobooks from VAT to ensure that they are treated in the same way as e-books and physical books.”
- Self-employed creatives 'cannot wait three months to be paid', government warned
- Industry welcomes Budget business rates cut but disappointment at lack of further action
- IPG and PA welcome Sunak's job retention bonus scheme
- Sunak's Job Support Scheme welcomed by PA and IPG
- Chancellor to offer shops £6k 'restart grants' and ponders online retail tax