This afternoon, the new chancellor of the exchequer, Rishi Sunak, announced the spring 2020 budget, which saw a host of pledges to help businesses. It was clear that the Covid-19 outbreak and the damaging impact it may have on businesses resulted in a number of last-minute changes to the budget, which was initially expected to focus on levelling-up the UK economy. While Covid-19 did dominate the budget, the chancellor stated that it was also a budget that aimed to result in a prosperous future.
The key budget points that will impact businesses are:
As part of the pledge to help SMEs cope with employees being absent to work, the Government has revealed that it will refund the cost of statutory sick pay in full for a total of 14 days. This refund is only available to businesses that have 250 or fewer employees.
To help businesses cope with the cost of dealing with Covid-19, which the Government predicts will disrupt supply chains and reduce consumer spending, the Government has introduced a number of measures to help support businesses that experience increased costs or a disruption to their cashflow. As such, businesses will be able to defer tax payments through an extension of Time to Pay, as well as apply for funds through the Business Interruption Loan Scheme, which will provide loans of up to £1.2m to support small and medium-sized enterprises. The Government has also pledged to pay up to 80% of losses that participating banks may incur on these loans and stated that businesses will not incur fees – all a part of encouraging banks to keep lending flowing.
For the 2020/21 tax year, the Government announced that it was abolishing business rates on retail and leisure businesses that had a less than £51,000 rateable value. This was another measure introduced to help businesses deal with the financial impact of Covid-19 and is expected to benefit a range of businesses such as shops, gyms, cinemas and cafes.
Businesses that are eligible for small business rate relief will receive a £3,000 cash grant. Again, this was announced as part of the Government’s plan to help businesses deal with the cost of Covid-19. It should be noted that this grant is only available to the smallest of businesses, so many SMEs will not be able to apply for this grant.
As part of the Government’s plan to level up the country, in the budget it was announced that money would be spent on transport, specifically improving road and rail networks. In addition to this, the Government has also pledged money to increase innovation throughout the country.
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