Budget 2020- What's in it for Small Businesses?
Most of the news is still focusing on Coronavirus at the moment and attention may have been diverted from some of the key points from last week's budget impacting small businesses so I thought it might be useful to provide a brief headline summary of these:
Statutory Sick Pay (SSP)
As mentioned in my updated Coronavirus blog, it was announced that small and meduim-sized business (SMEs) will be eligible for refunds on SSP paid in relation to COVID-19.
The refund is limited to two weeks per employee and will only apply to organisations employing fewer than 250 employees as at 28 February 2020. The eligibility period for this began on 13 March 2020.
The government have not yet provided detail on how to obtain the refund but will work with employers over the coming months to set the system up.
Due to the requirement to discourage people from attending GP surgeries, people are not required to produce a medical certificate but NHS 111 will be able to provide alternative evidence if required moving forward.
Temporary Coronavirus Business Interruption Loan Scheme
Aimed at providing businesses with access to bank lending and overdrafts during the crisis, the government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.
The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £1.2 million in value. This new guarantee will initially support up to £1 billion of lending on top of current support offered through the British Business Bank.
This scheme will be delivered by the British Business Bank and will launch in a matter of weeks.
HMRC Time to Pay
In response to COVID-19, HMRC has implemented a dedicated helpline for businesses and self-employed who are in financial distress and have outstanding tax liabilities. The aim of this is to discuss bespoke Time to Pay arrangements which will allow a limited deferral period on owed liabilities. This may help businesses with current cash-flow during the coronavirus crisis.
You can find more information here.
Changes to National Insurance Contribution (NIC) levels – increased employment allowance
Currently, the employment allowance (EA) provides businesses and charities with relief from their employer NICs bill. Restrictions on (EA) will come into place on 06 April 2020.
The present £3,000 relief that reduces employer’s NIC contributions is to be increased to £4,000 from April 2020. From 6 April 2020, you will only be able to claim if your Class 1 NIC bill was below £100,000 in the previous tax year.
I am not a payroll expert but you can find more information about the restrictions here.
Changes to business rates
It had already been announced that, from 1 April 2020 for one year, an increased discount of 50% for retail businesses with properties with a rateable value of below £51,000. It will also be expanded to include cinemas and music venues.
This has now been confirmed that to support small businesses in response to COVID-19, the retail discount will be increased to 100% and expanded to include hospitality and leisure businesses for 2021.
The government has also increased the business rate discount for pubs with a rateable value of below £100,00 from £1,000 to £5,000 in response to COVID-19.
In addition, the government will provide an additional £2.2 billion funding for local authorities to support small businesses that already pay little or no Business Rates because of Small Business Rate Relief (SBBR). This will provide a one-off grant of £3,000 to around 700,000 business currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs. For a property with a rateable value of £12,000, this is one quarter of their rateable value, or comparable to 3 months of rent.
A lot of the measures have been designed to help SMEs out during the current crisis and I fully expect that more measures will be put in place as the Coronavirus plan develops. Keep an eye on future blogs for any new developments and if there is a particular topic you want covered in the future, get in touch.