In his maiden budget, the new chancellor, Rishi Sunak, has announced a £30bn fiscal stimulus package to help combat the impact of coronavirus on the British economy including a one-year total suspension of business rates for small retail, leisure and hospitality businesses.
Headline measures include:
- A £12bn plan to provide support for public services, individuals and businesses, whose finances are affected by COVID-19. This will support businesses that experience increased costs or disruptions to cashflow and includes expanded Business Rates relief, a coronavirus Business Interruption Loan Scheme to support up to a further £1bn lending to SMEs and a £2.2bn grant scheme for small businesses
- A further package to widen the scope of Statutory Sick Pay (SSP) and make it “more accessible”. The government will temporarily extend SSP to cover individuals who are unable to work because they have been advised to self-isolate, and people caring for those within the same household who display COVID-19 symptoms and have been told to self-isolate
- Firms with fewer than 250 staff will be refunded for sick pay payments for two weeks per employee
- An increase in the thresholds at which employees and the self-employed start paying
- National Insurance contributions (NICs) to £9,500 from April 2020
- Companies with a rateable value of less than £51,000 will be eligible for the tax holiday for the remainder of the year, with a one year extension also to be added to the business rates retail discount to the leisure and hospitality sectors
- The business rates pubs discount will be increased from £1,000 to £5,000, largely in response to the COVID-19 outbreak
- The government will also ensure that businesses and self-employed individuals in financial distress and with outstanding tax liabilities will receive support with their tax affairs as part of its Time to Pay scheme
- Corporation tax frozen at 19%
- Economy predicted to grow by 1.1% this year, revised down from 1.4% a year ago. However this does not take into account the impact of coronavirus
- Growth is also predicted to rebound to 1.8% in 2021-22, 1.5% in 2022-23 and 1.3% in 2023-24
- Inflation forecast of 1.4% this year, increasing to 1.8% in 2021-2022
- The Government will also borrow £14.6bn more this year than previously forecast, equivalent to 2.1% of GDP
A link to the full budget can be found here.