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A three-point plan – how will the budget affect solicitors?
Yesterday, the chancellor of the exchequer announced the budget that he said would “protect the jobs and livelihoods of the British people”.
The three-point plan aims to support the economy through the end of the COVID-19 pandemic, improve public finances, and begin to build the future economy.
Ahead of the budget, we made recommendations to HM Treasury on the steps that could be taken to support and boost the legal services sector, enabling it to drive the economic recovery from the pandemic.
Below are some of the key announcements and policies that will affect solicitors and their firms.
The chancellor opened by speaking about the need to protect jobs throughout the rest of the crisis and announced that the furlough scheme will be extended until the end of September.
Employers will be asked to contribute 10% towards wages from July, and 20% in August and September, while employees will continue to receive 80% of their wages throughout.
Support for the self-employed will also continue until September, with those who became self-employed in 2019/20 also now eligible for support.
Stamp duty holiday extension
As part of the chancellor’s support to help the economy recover from COVID-19, he announced that the stamp duty land tax (SDLT) holiday, which had been due to end on 31 March, would be extended until the end of June.
To help avoid a second cliff edge and provide a smooth transition, the nil rate band will be £250,000, double its standard level, from the beginning of July until the end of September.
We had raised concerns about the impact the 31 March cliff edge would have on the market and consumers and are pleased to see the government has followed our recommendation for a tapered transition.
The budget also included a £425 million top-up for local authority discretionary grants to businesses that have been affected by the pandemic.
Ahead of the budget, we recommended that the government increase the money available through the scheme.
The additional funding will provide much needed support for many and we have called on the government to ensure guidance to local authorities for the grants includes law firms and sole practitioners.
To help encourage investment, the chancellor announced that over the next two years when companies invest in eligible plant and machinery, they will be able to deduct 130% of the costs from their corporation tax bill.
Help to grow schemes
Finally, two new schemes to help small and medium businesses to grow were announced.
Help to grow: digital will provide a 50% discount on productivity enhancing technology worth up to £5,000, alongside free training.
To help drive productivity in the legal sector, we hope to see key lawtech applications in the approved software list
Help to grow: management will provide training from business schools in the UK, including mentoring and peer learning. 90% of the cost of training will be met by the government.
Both these schemes are intended to be in place by autumn.