What policies will have the most effect on your company?
Covid-19 Support
After announcing that up to 20% of the UK working population could be off work with COVID-19 at any one time, a support package worth £7bn was announced for business as part of £30bn worth of total support.
This will be made up of tax cuts, grants and loans including a new government backed loan scheme called the Coronavirus Business Interruption Loan which would offer loans of up to £1.2m to small businesses. The government will back up to 80% of losses on bank lending as a result.
The government confirmed that they would reimburse businesses for statutory sick pay up to 14 days for staff that have to self-isolate beginning from day one as opposed to day four. This includes staff advised that don’t show any symptoms. This is only for businesses with fewer than 250 employees.
The self-employed will be able to claim benefits quicker instead of having to wait eight days from their first application for Universal Credit. The minimum income floor has also been removed from universal tax credit.
He also confirmed that HMRC will accept deferred corporation tax payments over pre-agreed periods of time.
Business rates
For businesses that already claim business rates relief such as restaurants, shops and cinemas and have a rateable value of £51,000 or under will see their business rates abolished for one year. There would also be a 100% business rates discount for other leisure and hospitality businesses in England.
Any company that was eligible for small business rates relief will be allowed a £3,000 cash grant to support them – some 700,000 are estimated to qualify.
Pubs will also see a £5,000 one year business rate discount, up from £1,000. Duty on beer, cider and wine was also frozen.
Entrepreneurs relief
Widely expected to be altered or even abandoned, the Chancellor found a middle way by looking “to reform entrepreneurs’ tax relief rather than abolish it.”
The lifetime limit for relief on Capital Gains will reduce from £10m to 1m which he estimates will only affect 20% of small businesses. The funds will be spent on business tax relief for investing in buildings, employment, research and development.
Insolvency and administration
One of the most controversial measures was revealed as the red book was published after the speech which contains the actual figures the budget is based upon.
HMRC Preferential status, the measure to reinstate HMRC ahead of floating charge holders and other unsecured creditors, will come into force on 1st December 2020 and will also be extended to Northern Ireland for the first time.
R3, the trade body for the insolvency industry and several other groups including the City of London Law Society and the Chartered Institute of Credit Management wrote to the former Chancellor Sajid Javid to signal their opposition but the measure is going ahead after a six month delay.
This could potentially make it harder to rescue and restructure companies in distress, reduce access to finance for small business and enterprises, increase the harm done to other businesses in insolvency cases and could ultimately result in lower funds being recouped for the Treasury.
Business funding
The employment allowance will be increased by a third to £4,000; the R&D tax credit will be increased from 12% to 15% and there will be £130m additional funding for start-up business loans and an injection of £200m into the British Business Bank for investing in scale-ups.
The NIC threshold will increase from £8,632 to £9,500 and there will be a one-year NIC break for companies that employ military veterans.
Fuel duty and red diesel
Against some suggestions, fuel duty will remain frozen for another 12 months.
Red diesel users were among the few clear losers in the budget with tax relief to be abolished on the fuel for most industries from 2022. This does not include agriculture which is exempt along with rail, fishing and domestic heating users.
As more information comes out in the future days and weeks and businesses have a better understanding of the new opportunities and threats they may face, we’re always available to listen.
We can go through your unique circumstances and come up with potential solutions and strategies not only to shore up your finances but ultimately bring them firmly back into the black.