Published Monday 16th March 2020
The Budget for 2020 was released on March the 11th, and it was Chancellor Rishi Sunak first budget in the House of Commons. The announcement covered what the government’s tax and spending plans are for the year. It can have a direct impact on UK businesses, and it is important that company owners are aware of how it will affect them.
Coronavirus and UK Business
Back in December 2019, it was announced that there was an outbreak of Covid-19 in Wuhan, China. The virus is described as a type of flu and to date, the outbreak has resulted in more than 126,000 being infected, of which 4,600 have died. As those diagnosed with the virus in the UK continues to rise, the coronavirus was heavily discussed in the Budget 2020.
For those who are advised to self-isolate, they will now be entitled to statutory sick pay, even if they haven’t presented any symptoms. For those who are self-employed and are not eligible to claim statutory sick pay can instead claim contributory Employment Support Allowance. Furthermore, the Employment and Support Allowance (ESA) will be available from day one, unlike after a week as it currently stands. Firms who have fewer than 250 staff members will be refunded for sick payments for two weeks. In addition to this, smaller firms will be able to gain access to “business interruption” loans of up to £1.2m.
Small Businesses
In a bid to support small, local businesses, Chancellor Rishi Sunak has announced that any companies with a rateable value of less than £51,000 will not be required to pay any business rates. It will apply to an array of businesses including cinemas, shops, hotels and restaurants. Also, firms that are eligible for small business rates relief will receive a £3,000 cash grant.
The Budget has also announced that there will be £28 million provided to help towards new businesses and up to 10,000 start-up loans offered to support entrepreneurs and those looking to start their own company.
Wages and Salaries
The National Insurance Contribution threshold will shift from £8,632 to £9,500, which is set to save a typical employee around £104 a year (from April). Businesses will be required to pay their staff more as the National Living Wage increased from £8.21 to £8.72.
High-Street and Pubs
To try and support the high-street, there will be a new pub discount put in place and it will take £5,000 off of the business rates bill for pubs that have a rateable value of below £100,000. In addition to this, high street business rates will also be reviewed later on in the year.
Healthcare
It is said that the NHS will receive an additional £6 billion of new funding to help support the public service. The boost in funding should help to create 50 million more GP surgery appointments, employ 50,000 more nurses, and support for those who have learning disabilities and autism. In addition to this, over £100 million between 2020 to 2021 will help fund 40 new hospitals.
Economy
Inflation is expected to drop to 1.4% in 2020 but is predicted to rise again in 2021 to 1.8%; this will likely have a direct impact on UK businesses. The economy is also expected to grow by 1.1% this year, but this is without the consideration of coronavirus.
These changes will undoubtedly affect UK businesses, no matter the industry. Hopefully, with the added funding for small businesses and also the NHS, there should only be positive effects, but when you consider unpredictable impacts, such as the coronavirus, it can be difficult to determine the future of your company.
Our experienced cost reduction consultants understand the affects the Budget 2020 could have on your business and can use their expertise to support you. If you are interested in discussing your business with one of our team members, then please do not hesitate to get in contact with us today.