Budget 2020
Chancellor Rishi Sunak delivered his first budget yesterday and as expected was largely dominated by the coronavirus emergency.
Following the Bank of England announcement of an immediate reduction in the base rate of interest from 0.75% to 0.25% the budget introduced several measures to assist with the expected difficulties that lie ahead.
Here’s some highlights from yesterdays budget that affect our clients:
Government to cover statutory sick pay for SMEs
Responding to COVID-19 it was announced that Statutory sick pay (SSP) will be available to all those advised to self-isolate from the virus. The government will refund the cost of statutory sick pay for up to 14 days to businesses with fewer than 250 employees.
- employers should maintain records of staff absences, but should not require employees to provide a GP fit note
- the eligible period for the scheme will commence from the day on which the regulations extending SSP to self-isolators come into force
- existing systems are not designed to facilitate such employer refunds for SSP, the government will work over the coming months to set up a repayment mechanism
Those who cannot claim SSP, the self-employed for example, are to be provided with easier access to Universal Credits and the Contributory Employment and Support Allowance.
Entrepreneurs’ Relief
There was the possibility of Entrepreneurs’ Relief being scrapped in light of it’s expected increased use due to the recent IR35 changes but instead the lifetime allowance of £10 million was reduced significantly to a lifetime allowance of £1 million.
Business Rates Reliefs
The government has already announced the Business Rates retail discount will be increased to 50% in 2020-21. To support small businesses affected by COVID-19 the government is increasing it further to 100% for 2020-21. The relief will also be expanded to the leisure and hospitality sectors.
The government has also already announced the introduction of a £1,000 Business Rates discount for pubs with a rateable value below £100,000 in England for one year from 1 April 2020. To support pubs in
response to COVID-19 the discount will be increased to £5,000.
Small business grant funding
To support small businesses who claim Small Business Rate Relief (SBRR), the government will provide £2.2 billion of funding for Local authorities in England. This will provide £3,000 to around 700,000 business currently eligible for SBRR to help meet their ongoing business costs.
Coronavirus Business Interruption Loan Scheme
A “Coronavirus Business Interruption Loan Scheme” will support up to a further £1bn lending to smaller businesses. The government will guarantee bank loans to small businesses on amounts of up to £1.2m. The government will cover bank losses of up to 80pc.
Employment Allowance
The government will increase the Employment Allowance from £3,000 to £4,000 from April 2020. This will benefit around 510,000 businesses by reducing their costs of employment.
Income Tax
The government delivered on its manifesto promise not to increase Income Tax, National Insurance, or VAT. The Income Tax bands for 2020-21 have also been maintained at 2019-20 levels.
It was confirmed that the tax threshold for National Insurance Contributions will rise to £9,500 from April 2020 (was £8,632). This should save £100 a year in National Insurance contributions for some 31 million people.
The previously announced reduction in Corporation Tax from 19% to 17% – from April 2020 – has been scrapped. Corporation Tax rates are to remain at 19% for the financial year beginning 1 April 2020.
and more…
The full details can be read in the whopping 125 page document here:
https://www.gov.uk/government/publications/budget-2020-documents
We will of course be in touch as and when necessary with any matters that affect our clients with further details / developments.
Best wishes,
The Middlers Team
