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Budget 2020 gives the UK business community a shot in the arm

Chancellor Rishi Sunak has introduced a number of initiatives to reassure businesses about the possible impact of Coronavirus, as well as unveiling broader measures designed to promote growth throughout the UK's community of businesses and entrepreneurs.

Chancellor Rishi Sunak has introduced a number of initiatives to reassure businesses about the possible impact of coronavirus, as well as unveiling broader measures designed to promote growth throughout the UK’s community of businesses and entrepreneurs.

In what is already being described my many as a “Budget for small business and the self-employed”, key policies include:

Temporary coronavirus business interruption loan scheme

Mr Sunak announced the immediate creation of a temporary coronavirus business interruption loan scheme, designed to give lenders the flexibility to provide up to £1.2m in guaranteed loans and overdrafts to small and medium-sized enterprises (SMEs) impacted by the coronavirus outbreak. As part of the scheme, the government will provide lenders with a guarantee of 80% of loans advanced, which will not be charged for.

HMRC opens dedicated COVID-19 helpline for firms seeking Time to Pay renegotiations

The Chancellor revealed that HM Revenue and Customs (HMRC) will open a dedicated helpline for all small business owners and self-employed individuals suffering financial distress as a result of COVID-19. The helpline will enable taxpayers to access Time to Pay tax arrangements with HMRC where necessary, providing much-needed support and breathing space for those most affected.

Business rates relief for high streets in England

In response to the prospect of high-street retailers facing tougher times because of the coronavirus outbreak, the Chancellor also announced further business rates relief for small retailers. This relief will be extended to include businesses in the leisure and hospitality sectors and will be available to business premises with a rateable value of less than £51,000.

These temporary measures, taken together with existing Small Business Rates Relief, mean that around 900,000 properties, or 45% of all properties in England, will receive 100% business rates relief in 2020-21.

Small business grant funding in England

Recognising that many small businesses already pay little or no rent under Small Business Rate Relief provisions (SBRR), the government has introduced measures to provide additional support.

They will provide £3,000 of grant funding to businesses currently eligible for SBRR or Rural Rate Relief. Around 700,000 businesses are expected to benefit from this funding.

Structure and buildings allowance up from 2% to 3%

The annual rate of capital allowances available for investment in new or renovated existing non-residential structures and buildings will increase from 2% to 3%. This tax relief will be a bonus for any business looking to build or buy in the coming year.

R&D expenditure credit up from 12% to 13%

All companies undertaking qualifying research and development (R&D) activity will be able to claim additional tax relief from next month. An increase in the rate of the Research and Development Expenditure Credit (RDEC) from 12% to 13% will provide further support to businesses investing in R&D activity, helping to drive innovation in the economy.

Corporation tax rate held at 19%

Planned cuts to UK corporation tax from 19% to 17% were shelved late last year and the Chancellor showed no appetite to reintroduce these cuts today. In doing so, Mr Sunak is expected to generate an additional £6 billion, much of which is likely to be spent on the NHS. Sunak insisted that despite shelving the cuts, the UK’s corporation tax rate is “still the lowest rate in the G20”.

Funds ring-fenced for small business funding

Mr Sunak also pledged £130m in new funding to extend Start-up Loans, giving up to 10,000 more UK entrepreneurs the chance to get a leg up between 2021 and 2022.

In addition, a further £200m of fresh funds have been made available via the British Business Bank, designed to increase the growth opportunities for businesses nationwide.

If you have any questions about how any of these announcements may affect you and your business, get in touch with us today on 0800 0523 555 or use our simple online enquiry form.

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