March 2020 Budget Highlights
On 11 March 2020, Rishi Sunak presented his first budget after less than a month in the job. Some of the budget provisions simply carried through on promises already made by his predecessor. Others were last minute changes implemented to deal with the business effect of the coronavirus outbreak. Some highlights of the Budget were as follows:
Sick Pay
Employees who are advised to self-isolate due to coronavirus are to be eligible for Statutory Sick Pay (SSP). SSP entitlement will also take effect from day 1 instead of after 3 waiting days. To compensate small employers for this change, businesses with fewer than 250 staff will be able to reclaim the first two weeks’ SSP. Whilst not eligible for SSP, the self-employed were also covered. Those who have to self-isolate will be eligible for contributory Employment Support Allowance instead.
National Insurance
The threshold for paying Employee’s National Insurance Contributions will increase from £8,632 to £9,500. The same increase is being applied to the threshold for the self-employed to pay Class 4 National Insurance Contributions. The employment allowance, which allows eligible small businesses to claim a reduction in their Employer’s National Insurance bill, is to increase from £3,000 to £4,000.
Business rates and business grants
A 100% discount for business rates is to be applied to eligible retail, leisure or hospitality businesses with a rateable value below £51,000 for the next 12 months. This is likely to be welcomed in these business sectors expecting to see the biggest drops in trade due to coronavirus. Pubs with rateable values up to £100,000, who are likely to be worst hit, will also see their current £1,000 discount rise to £5,000 in the coming year.
A new £3,000 cash grant is going to be made available to businesses eligible for small business rate relief. Further detail on how to apply for this grant, which is to be administered by local authorities, is expected to follow.
Entrepreneurs’ Relief
Many had expected this relief, which reduces Capital Gains Tax on qualifying business sales, to be abolished. Whilst this has not happened, the lifetime allowance for this has been reduced from £10million to £1million.
Corporation tax
The 2016 Budget had included a plan to gradually reduce Corporation Tax to 17%. However, this has since been reviewed by the government and, as the current rate is low compared to most of the G20, this is to be kept at 19% for at least the next two years.
Whether you need to understand the effect of these changes or need advice on the existing rules we are here to help. Give us a call today on 01892 807001.
