The Chancellor must have been on re-write number 10 by the time he presented his budget today with the outlook on Coronavirus changing daily and the effect on the UK gathering momentum. Businesses currently face huge uncertainty over the coming weeks, will they be facing lock-down soon, are they ready to send their employees home to work and what will be the final cost of this global virus.
How has the Coronavirus affected the Budget?
Businesses found the Chancellor in a sympathetic mood, Rishi Sunak announced £30bn of support to help the nation cope with the Coronavirus and improve the country’s infrastructure. Mr. Sunak has today stood firmly behind the country’s small and medium-sized businesses recognising how they may be affected by the growing global pandemic. From abolishing business rates for some to an allowance for the self-employed affected by the Coronavirus. Here are the highlights of how Mr. Sunak plans to protect businesses from the pandemic:-
- Small firms will be able to access business interruption loans of up to £1.2m;
- The government will support small and medium-sized businesses to cope with the extra costs of paying Coronavirus related SSP by refunding eligible SSP costs;
- Business rates retail discount to be extended to 100% for 2020-21;
- Small Business Grant Funding of £3,000 for those businesses claiming Small Business Rate Relief;
- Time to pay and dedicated helpline from HMRC for businesses effected by Coronavirus;
Other changes in the Budget
The question is who has paid the price for Mr. Sunak’s generosity? Successful entrepreneurs, that’s who. It’s been widely speculated that the chancellor would make changes to entrepreneurs relief in this budget, those looking to sell their businesses in the near future have been hit with a blow especially if they are worth more than £1m. The chancellor announced that the lifetime limit for entrepreneurs relief would be reduced from £10m to £1m in an attempt to make the tax system fairer and more sustainable.
Despite this change, it’s hard to find fault with the Chancellor’s appetite to support businesses through what is going to be an unpredictable year. Further highlights affecting businesses and their owners are below:-
- Corporation tax set to remain at 19% for 2020;
- Structures and Buildings Allowance (SBA) increased to 3%;
- Further improvements to the R&D tax credits regime, by increasing the Research & Development Expenditure Credit from 12% to 13%;
- Employment Allowance to increase to £4,000;
- £10m invested in the country’s 38 Growth Hubs to further help businesses.
- Tapered allowance threshold for pensions tax relief will increase to £200,000.
What to do next?
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