Budget 2020: The News for Business
The budget of 2 budgets: a summary of the key announcements concerning business in the 2020 budget, both the immediate measures to reduce the impact of Coronavirus and the government’s plans to address the longer-term challenges in the economy.
2020: the budget of firsts. The first Budget of a new government, a new decade, and the first since the UK’s departure from the European Union. Delivered in the context of the recent Covid-19 outbreak, which poses significant and immediate challenges to the national and global economy, this budget was bound to be unique.
In many ways Rishi Sunak delivered 2 budgets in 1: The first part of the Chancellor’s speech set out the measures the government is taking to soften the impact of Coronavirus on the economy, businesses and individuals. In the second part of his speech Sunak laid out the government’s plans to address the longer-standing challenges in the economy, such as low productivity and the transition to a net zero emissions economy. Both parts of the speech have implications on businesses and the self-employed population.
1. Coronavirus: Measures introduced to limit the financial losses caused by Covid-19
With estimates that up to a fifth of the UK workforce could be off sick at the peak of the Coronavirus epidemic, a series of measures have been announced to limit the financial losses faced by both individuals and businesses.
Statutory Sick Pay (SSP) relief will be provided to SMEs with less than 250 employees, reimbursing businesses for the SSP they pay to staff who are off for up to 14 days with Coronavirus and those required to self-isolate in line with government guidelines. The SSP payments of £94.25 per week can be claimed by individuals on the first day absence, rather than the fourth day. For self-employed people, who are not eligible for SSP, the government advises that the welfare system is the best place to access financial support; during the Covid-19 outbreak those affected or self-isolating will be able to claim Universal Credit and access advance payments without needing to meet the requirements of the minimum income floor, enabling self‑employed people to receive support through this channel.
Acknowledging that many businesses will be significantly hit by a fall in demand, the government has extended its programme of Business Rates Relief. Having previously announced that the Business Rates retail discount will be increased to 50% in 2020-21, the relief will be expanded to the leisure and hospitality sectors and increased to 100% to support small businesses affected by COVID-19. For those businesses paying little or no business rates because of Small Business Rate Relief, the government will provide Small Business Grant Funding, grant payments of £3,000 to help small businesses to meet their ongoing business costs.
Further measures to reduce disruption in cash-flow include the launch of the Coronavirus Business Interruption Loan Scheme, which will provide access to bank lending and overdrafts for long-term viable businesses, and the extension of HMRC’s Time to Pay Scheme, enabling businesses and self-employed people to defer tax payments on an agreed timescale.
This article was created thanks to a project that is part funded by the North of Tyne CLLD programme and delivered by PNE Enterprise.