In the first Budget since October 2018, new Chancellor Rishi Sunak has set out a comprehensive set of measures to support business and households through the coronavirus crisis with business rate relief, time to pay tax deferrals and underwriting the cost of statutory sick pay for smaller businesses
With coronavirus as the major concern facing the country, Sunak set out details of a £7bn fiscal stimulus to support British businesses and households through the crisis, while setting aside a £5bn funding pot for the NHS to deal with anything thrown up by covid-19.
‘What everyone needs to know is that we are doing everything we can to keep this country’s people healthy and financially secure,’ Sunak said.
‘Our economic response to bring stability and security. Let me say that we will get through this together. We will rise to this challenge. This virus is the key challenge facing our country today, but it is not the only challenge.
‘As we deal with coronavirus it is a Budget that deals with security today, but plans for prosperity tomorrow.’
‘There is likely to be a temporary disruption to our economy and business supply chains are being disrupted. For a period our productive capacity will shrink and there will be a reduction in consumer spending. This will have a significant impact on the UK economy but it will be temporary – people will return to work… life will return to normal. For a period it will be tough but we will return to normal.’
‘We need to support those who get sick or can’t work, we need to supply a bridge for businesses – we need a response that is temporary, timely and targeted.’
Sunak also said that he had been working closely with the Bank of England which announced a series of measures earlier today including cutting the base rate and releasing funding for small to medium sized businesses (SMEs).
The Chancellor said the government would use ‘fiscal action to support public services, households and businesses, with a three-point plan’.
‘Whatever extra resources our NHS needs to cope with coronavirus they will get, whether it’s billions of pounds or millions of pounds, we stand behind our NHS
‘During the immediate crisis, we will make sure that our safety net remains strong enough for people to fall back on.
Statutory sick pay (SSP) will be available from day one for all those who are told to self-isolate and employees will be able to contain a sick note by contacting 111 rather than going to a GP. For those self employed and working in the gig economy, Sunak said the government planned to ‘make it quicker to access benefits. £1bn commitment to support financial stability of people.
Those on contributory employment and support allowance will be able to claim from day one instead of day eight.
Support for businesses
‘The measures on SSP are crucial for those who need to take time off work. If we expect 20% of workforce to be unable to work, so cumulative cost to SMEs would hit them hard. For businesses with fewer than 250 employuees.the cost of providing SSP for up to 14 days will be refunded by the government in full – this is equivalent to £2bn for small businesses.’
HMRC will also scale up the time to pay service to allow businesses and self employed to defer tax payments. A new helpline has been set up with 2,000 staff standing by ready to help.
Sunak also said banks would offer loans of up to £1.2m to support SMEs.
On business rates, Sunak said he was taking an ‘exceptional step to abolish business rates for live venues totally for this year and this will be extended as a 100% retail discount to any eligible retail operation.
For any businesses with rateable value below £51k, this will be waived equal to a tax cut worth £1bn for next financial year.
‘Nearly half of all business properties in England will not pay business rates,’ Sunak said.
‘On small business rates relief there will be a £3,000 cash grant per business to 700,000 of smallest businesses, and this is part of a £7bn support package for coronavirus.’
To assist small and medium businesses a new temporary business interruption loan will be made available to help with cashflow.
The overall package also sets aside up to £5bn for NHS to deal with coronavirus crisis, while the entire package equates to a £30bn fiscal stimulus to support British businesses and people.
HM Treasury: Support for those affected by Covid-19