Budget 2020 Summary

March 12th 2020

Here is a summary of the key announcements in the Budget 2020 statement, made on Wednesday 11 March.

The newly appointed Chancellor, Rishi Sunak, announced a spirited Budget with a repeated emphasis on ‘getting things done’, echoing the recent election campaign.

His initial focus was on the short-term measures needed to deal with the challenges the UK faces as a result of the coronavirus pandemic. These amounted to a £12bn fiscal stimulus, with more available if required. There was help for both businesses and individuals.

For the coming year, statutory sick pay will be available to more people and so will some other social security benefits. Business Rates will be reduced or even eliminated for some smaller businesses – at least in the short term. Other immediate support initiatives for smaller businesses include greater access to bank lending, as well as enhancements to the HMRC ‘Time to Pay’ service.

The Chancellor is due to announce another Budget in the Autumn and so there were several consultations about possible future tax changes, including new proposals on the treatment of fund management companies, pension tax administration, and aspects of research and development tax credits.

Download the full guide here budget-2020-summary

Special provisions to help businesses during the Covid-19 Pandemic

March 18th 2020

The Government yesterday announced a number of special provisions to help businesses during the Covid-19 (“Coronavirus”) pandemic.Here is a link to the Government website page with links to their advice - https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response

Within this page is advice for businesses, employers and employees -https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19

The advice for businesses includes information on:

Statutory sick pay relief package for SMEs

For businesses with fewer than 250 employees (at 28 February 2020), the cost of providing 14 days of Statutory Sick Pay per employee will be refunded by the government in full

A repayment mechanism will be worked on over the next few months

Businesses are encouraged to keep detailed records of any payments to evidence any future reclaim.

A 12-month business rates holiday for all retail, hospitality and leisure businesses in England for 2020/21

Businesses should receive new bills from their local authority

Guidance for local authorities on the business rates holiday will be published by 20 March by The Ministry of Housing, Communities and Local Government

A grant of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000

Any enquiries should be directed to the relevant local authority.

A small business grant of £10,000 for all business in receipt of small business rate relief or rural rate relief

If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.

The Coronavirus Business Interruption Loan Scheme

The Scheme will support loans of up to £5 million.

The loan will be interest free for the first 6 months, as the government will cover the first 6 months of interest payments.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims)

This will be delivered by the British Business Bank (BBS) and will launch from 23 March 2020.

BBS advises that the borrower always remains 100% liable for the debt. Here is a link to the BBS website with further details and conditions -  https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

The HMRC Time To Pay Scheme to help with tax

The number for HMRC’s dedicated helpline is 0800 0159 559.

These arrangements will be agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

Insurance

The government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc. is sufficient to make a claim if businesses have cover for both pandemics and government-ordered closure.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Standard business interruption insurance policies which are dependent on damage to property will exclude pandemics.

Additional resources

https://www.gov.uk/government/news/coronavirus-covid-19-guidance-for-employees-employers-and-businesses

In this link Gov.UK also mention that additional resources are also being made by a number of private lenders who are making funds available to small businesses impacted by COVID-19, including £2 billion from Lloyds Banking Group and £5 billion from NatWest.  This item includes links to the relevant pages of the banks websites.

Banking Arrangements

If you are in difficulties with your cash flow generally, then we strongly recommend that you speak with your bank manager as a matter of urgency in order to discuss additional facilities being made available and capital repayment holidays on existing loans.

Off-payroll working (IR35) changes delayed

Finally, in a speech to the House of Commons last night the Government announced that the extension of the Off-payroll working provisions to the private sector will not now be implemented from 6 April 2020.  Instead the existing off-payroll working rules will remain in force until April 2021.

The ICAEW Tax Faculty have reported that HMRC has said that Status Determination Statements (SDS) already issued will have no standing in law and will not be used as evidence in any enquiry dispute during the coming year.