Unveiling the 2020 Spring Budget, the Chancellor of the Exchequer has today pledged to support small firms by:
- Increasing the discount on national insurance contributions that small firms can receive through the Employment Allowance from £3,000 to £4,000, and introducing a 14-day SSP rebate for small firms with fewer than 250 employees for those unable to work because of coronavirus.
- Reforming – rather than scrapping – entrepreneurs’ relief, a reduction in capital gains tax that small business owners receive when selling their firms, by reducing the lifetime limit to £1 million.
- Extending the Retail Discount on business rates to a wider set of small businesses and exempting those who qualify for the discount from rates entirely for one year, increasing the pubs discount to £5,000, and committing to a fundamental review of the rates system.
- Delivering on a promise to introduce a one-year national insurance holiday for small employers that take on a member of staff from the ex-forces community.
- Making grants of £3,000 available to the 700,000 businesses that currently qualify for Small Business Rates Relief, whilst committing £130 million to the British Business Bank’s Start-Up Loans programme, £1.2 billion worth of funding for targeted loans to smaller firms affected by coronavirus, and £5 billion worth of new export finance.
- Widening access to HMRC Time To Pay arrangements for firms struggling with cashflow issues, creating a £500 million hardship fund for the vulnerable – including the self-employed who cannot claim SSP – to access through local authorities, and temporarily relaxing Minimum Income Floor rules – which hurt those with fluctuating incomes – from the Universal Credit system.
- Bringing forward legislation to protect access to cash for those who need it.
- Investing £2.5 billion in pothole repairs, £5 billion in gigabit-capable broadband, £5 billion in flood defences, and £1 billion in zero-carbon transport initiatives whilst maintaining the fuel duty freeze for a tenth successive year.
FSB National Chair, Mike Cherry said: “The Chancellor has thankfully unveiled a small business Budget.
“The measures he’s put forward today – coupled with those unveiled by the Bank of England this morning – should go a long way to reinjecting optimism back into the small business community after years of uncertainty.
“It was encouraging to hear the Chancellor saying he will take forward our proposals for reform of entrepreneurs’ relief, and we look forward to working with the Treasury to protect the thousands of everyday entrepreneurs who make use of this incentive to help fund their retirement every year.
“Expanding access to statutory sick pay for those impacted by coronavirus is the right thing to do, and so too is making that access affordable for small businesses. By announcing an extension of the retail discount and an SSP rebate for small firms, as FSB called for, the Chancellor has shown he’s on their side. The rebate must be easy to access.
“Equally, by embracing our recommendation to increase the discount on national insurance contributions that small employers can claim through the Employment Allowance this year, the Chancellor will be providing some real breathing space for those that create jobs and growth in our economy. As things stand, the jobs tax serves as a disincentive to growth.
“The introduction of a national insurance holiday for small employers that hire ex-forces personnel will go a long way to helping to fill skills gaps and bring fresh perspectives into workplaces. It would be good to see that holiday extended to those who employ the long-term unemployed, and those with disabilities or mental health conditions.
“We’re already seeing supply chains disrupted and footfall hurt due to the spread of coronavirus. Against this backdrop, the Chancellor’s commitments to making more small business finance available, deferring tax bills, reducing business rates and setting up a hardship fund for the vulnerable – including the self-employed who cannot claim SSP – are all absolutely critical. It is critical that these measures increase both the availability and affordability of borrowing for small firms.
“The priority at this point needs to be ensuring that these support mechanisms reach the small firms that need them as swiftly as possible. We can’t have any hold-ups at local authorities, banks or HMRC.
“One in four small high street businesses say cash is the most popular payment method amongst their customers. We’ve campaigned alongside Which? and others to protect our cash infrastructure, and it’s good to see the Chancellor taking action on this front.
“Propelling investment in broadband, local roads and flood defences will help to unleash small business confidence. Too many firms – particularly those in rural areas – are held back by derisory infrastructure.
“This Chancellor is right to recognise that levelling up starts with supporting the 5.8 million small businesses that are at the heart of communities right across the UK.”
FSB London Regional Chair, Michael Lassman said: “Small businesses across London will be relieved by the solid package of measures put forward by the Chancellor today.
“It will be vital that these measures are rolled out to London’s small business community as quickly as possible particularly in these challenging times.
“The cost of doing business is already very high in the capital and for those hospitality, leisure and retail type small businesses in central London who won’t be able to benefit from the 100% business rates retail discount with a rateable value of below £51,000, it will be important to ensure that these small businesses are supported by their local council in other ways over the next year”.