We look at Chancellor Rishi Sunat’s first budget and what impact this will have on UK SMEs.
Yesterday’s budget was primarily focussed on how short-term relief could be put in place to support UK SMEs during Coronavirus disruption which will be welcomed by businesses who are looking to lessen the impact on their bottom line. In addition to an immediate £30 billion spending package being made available in order to cushion the blow of Covid-19, the government pledged the following in the budget:
- The UK Government will cover statutory sick pay for up to 14 days for those that have been advised to self-isolate. This will be available to companies with fewer than 250 employees. The cost of this will be £2bn to the country.
- Self-employed workers will be able to claim contributory Employment Support Allowance
- A Business Interruption Loan Scheme will take further strain off smaller firms covering losses up to 80%. Loans of up to £1.2 million will be accessible.
- Business rates will be scrapped for smaller firms who are more likely to be affected by the virus outbreak, primarily retail, leisure and hospitality in a tax cut worth £1bn. This will apply to businesses with premises with a rateable value of less that £51,000.
- To cushion the blow further, firms that do not pay any business rates will be liable to receive a cash grant of £3,000 – an overall injection of £3bn from the Government.
- The Entrepreneur’s Grant will be scaled back by 90% as this revenue will need to be recycled and directed elsewhere.
- £130bn of new funding will be available to extend start up loans as well as £5bn of new export loans.
- £200m in new funding for
British Business Bankto invest in scale up and businesses will be able to defer of HMRC tax payments.
- R&D tax credit will increase from 12% to 15%
It is now vital that the Government services are swift as steady
For a fuller review of the 2020 budget and how it will affect your business, click here.