We’ve taken a look at the latest budget, and identified key decisions which may affect your business. If you’re unsure how you might be affected, or want to check you are making the most of the range of tax reliefs available to you, please let me know.
A buffer from the impact of the Coronavirus
Employers with fewer than 250 employees will receive refunds on Statutory Sick Pay for up to two weeks per employee affected by COVID-19. SSP will be payable from day one for those required to self-isolate. It will also be payable to people caring for those in the same household with symptoms. We don’t yet know how these repayments will be arranged, but the government promises to liaise with employers in ‘the coming months’ to set up a process ‘as soon as possible’. Additionally, employees won’t require a GP fit note, as NHS 111 is expected to provide a temporary alternative.
Recognising that Business Rates are no longer fit for purpose
Rates relief for leisure businesses
With retail, leisure and hospitality businesses coming under particular pressure during the pandemic, eligible businesses with a rateable value below £51,000 will pay no Business Rates in 2020-21. The government announced further help for pubs.
Fundamental Review
Better still, the budget recognises that the system requires a significant overall. The government say they’ll publish a ‘fundamental review’ and will consider further reform when they report back in the autumn.
Extra grant for those receiving Small Business Rate Relief
For small businesses who already pay little or no business rates with Small Business Rate Relief, they’ll be eligible for a £3,000 grant to help with extra costs.
Reduction in Entrepreneur’s Relief to £1m lifetime allowance
We were expecting changes to Entrepreneur’s Relief, which can reduce the capital gains tax you pay when you sell all or part of your business.
The government say that the existing scheme was only benefiting the most affluent taxpayers. It currently provides a lifetime benefit of £10m. Their report says it was doing ‘little to generate additional entrepreneurial activity’. Their proposal reduces the allowance to £1m. They say this will mean 80% of those using the scheme will continue to benefit.
National Insurance threshold goes up, as does Employment Allowance
The threshold at which employees pay National Insurance will increase from £8,632 to £9,500 in April. In addition, employers who pay less than £100,000 in National Insurance will receive Employment Allowance of up to £4,000 (up from the current rate of £3,000).
No change to duties on alcohol
Finally, if you need a stiff drink in these difficult times, you’ll be pleased to learn that all alcohol duties have been frozen!
Elly McNamara is one of our Directors and Chartered Accountants. We’re ready to talk through the impact of the budget on your business. If you’d like to discuss your business performance and plans contact us today for chat.
