Chancellor unveils business friendly budget, strong emphasis on coronavirus
In the first budget since October 2018, the Chancellor has announced a pro-business set of measures, including an overhaul of entrepreneurs’ relief, extension of the retail discount and a 30 billion pound stimulus plan to curb the economic impacts of the coronavirus.
Unveiling the 2020 spring budget, the Chancellor of the Exchequer has pledged to support small firms through the coronavirus and the resulting economic downturn.
“I am announcing today, in total, a £30 billion fiscal stimulus to support British people, British jobs and British businesses through this moment,” Prime Minister Boris Johnson’s new Chancellor, Rishi Sunak, said.
“What everyone needs to know is that we are doing everything we can to keep this country, and our people, healthy and financially secure.”
Measures targeted at small business include:
- Increasing the discount on national insurance contributions that small firms can receive through the Employment Allowance from £3,000 to £4,000, and introducing a 14-day SSP rebate for small firms with fewer than 250 employees for those unable to work because of coronavirus.
- Reforming – rather than scrapping – entrepreneurs’ relief, a reduction in capital gains tax that small business owners receive when selling their firms, by reducing the lifetime limit to £1 million.
- Extending the retail discount on business rates to a wider set of small businesses and exempting those who qualify for the discount from rates entirely for one year, increasing the pubs discount to £5,000, and committing to a fundamental review of the rates system.
- Delivering on a promise to introduce a one-year national insurance holiday for small employers that take on a member of staff from the ex-forces community.
- Making grants of £3,000 available to the 700,000 businesses that currently qualify for Small Business Rates Relief, while committing £130 million to the British Business Bank’s Start-Up Loans programme.
- Setting up a new, temporary Coronavirus Business Interruption Loan Scheme that will see banks offer loans of up to £1.2 million to support small and medium-sized businesses, and £5 billion worth of new export finance.
- Widening access to HMRC Time To Pay arrangements for firms struggling with cash flow issues, creating a £500 million hardship fund for the vulnerable – including the self-employed who cannot claim SSP – to access through local authorities, and temporarily relaxing minimum income floor rules – which hurt those with fluctuating incomes – from the Universal Credit system.
- Investing £2.5 billion in pothole repairs, £5 billion in gigabit-capable broadband, £5 billion in flood defences, and £1 billion in zero-carbon transport initiatives while maintaining the fuel duty freeze for a 10th successive year.
Praising the business friendly budget, FSB national chairman Mike Cherry said, “The Chancellor has thankfully unveiled a small business budget.
“The measures he’s put forward today – coupled with those unveiled by the Bank of England this morning – should go a long way to reinjecting optimism back into the small business community after years of uncertainty.”
Earlier on Wednesday, the Bank of England opted for another rate cut in order to help the economy battle the coronavirus.