Budget Day 2020 started off with interest rate cuts announced by the Bank of England in order to support the economy amid the Cornonavirus outbreak. Interest rates have been cut from 0.75 to 0.25% taking borrowing costs back down to the lowest level in history. There were further announcements made about the support that the government will be giving to small businesses by way of further government backed loans.
Chancellor Rishi Sunak gave a very welcome budget for both small businesses and employees alike. Here is a brief guide to the announcements in today’s budget that could affect you;
- SSP will be available to individuals self-isolating from day 1 instead of day 4 and sick notes will be available by contacting NHS 111
- Self Employed individuals should be able to access benefits quicker and easier should they be off work sick.
- Employment and support allowance can be claimed from day 1 instead of day 8. The minimum income floor for universal credit will be removed and the need to attend a job centre in person will be removed.
- Small business with fewer than 250 employees will be able to claim back sick pay rebates for two weeks for corona related sickness.
- Small firms will be able to access “business interruption” loans of up to £1.2 million.
- Business rates will be abolished for 12 months for SME’s in the retail, hospitality and leisure industry with a rateable value below £51,000.
- Any business eligible for small business rates relief will be allowed a £3,000 cash grant. This includes furnished holiday lets.
- Employment allowance will be increased from £3,000 to £4,000 from April 2020.
- Entrepreneurs Relief will be retained but the lifetime limit will be reduced from £10m to £1m
- VAT is to be scrapped on all ebooks and digital publications
- There will be a new National Insurance relief for those employers recruiting ex-armed forces as employees.
- There will be a new plastic packaging tax to be introduced to encourage businesses to be more sustainable.
- Red diesel relief will be abolished from April 2022 but the chancellor recognises the challenges to the agricultural sector so relief will be retained for farmers.
- The threshold for National Insurance Contributions will increase from £8,632 to £9,500. It will mean those earning over £9,500 will be £82 a year better off.
- Changes to the pension taper will mean that anyone earning £200,000 or less will not suffer a reduced annual allowance and anyone earning below this figure will still be able to contribute up to £40,000 into their pension. This should particularly help in the health sector.