It was a tripartite of firsts for the Budget 2020. It was the first one since Britain left the EU, as well as the first delivered by Chancellor Rishi Sunak and under Boris Johnson’s government.
We were all anticipating some big changes but what exactly do the announcements mean for UK businesses? Here, we explore just that…
There were a number of announcements that revealed the government’s plans to support those affected by the coronavirus outbreak. As part of their three-tier response to lessen the economic impact, Statutory Sick Pay (SSP) will be provided from day 1 of illness to those who need to self-isolate. Smaller enterprises (with less than 250 staff) will receive a reimbursement for any sick pay for up to 14 days.
On top of this, banks will offer ‘business interruption’ loans of up to £1.2m to SMES. Sunak also announced the scaling up of the ‘Time to Pay’ service, which gives both businesses and the self-employed the opportunity to delay tax payments.
As part of the government’s reaction to the coronavirus outbreak, it was revealed that businesses rates would be completely eradicated for smaller businesses in the retail, leisure and hospitality sectors – providing they have a rateable value under £51,000. Additionally, business rate discounts for small pubs will increase from £1,000 to £5,000 (if they have a rateable value below £100,00).
It was also announced that the planned tax increases on beers and spirits were to be abolished, plus the duty on alcoholic drinks was to be frozen. The Treasury will also be reviewing the business rates system, following complaints that they were too high.
We predicted that entrepreneurs’ relief would be potentially obliterated or reduced, and the latter was announced. The lifetime limit has been cut from £10m to £1m, but this will only impact 20% of business owners.
The Employment Allowance – which enables employers to claim a reduction on their National Insurance bill – will also increase from £3,000 to £4,000.
There were other revelations related to taxes too – including that, as anticipated, the NICs threshold will surge from £8,632 to £9,500. Also, as expected, fuel duty was frozen for the 10th year in a row.
VAT on digital publications has also been removed. This presents an opportunity for those who purchase and claim subscriptions as part of their business.
Whether you need help claiming on expenses like subscriptions, or need help preparing monthly or quarterly accounts, Nabarro Poole are here. We’ve been supporting SMEs with their financial situation for years – even in times of significant change and uncertainty like these.