Thousands of small businesses in England are set to enjoy significant financial benefits following Wednesday’s budget announcement.
The main benefit for small businesses comes in the form of business rate relief as the new Chancellor Rishi Sunak announced that business rates will be abolished for one year for companies with a rateable value of less than £51,000. This major change comes in response to the current coronavirus pandemic and has been implemented to help small businesses deal with the subsequent economic fallout.
The measure will primarily affect shops, cinemas, restaurants and hotels which are likely to be the worst affected sectors in light of people choosing to travel less and stay at home. Mr Sunak has stated that the temporary business rates abolition represents a tax cut of “over £1 billion, saving each business up to £25,000”.
The temporary abolition of business rates is not the only measure that was included in the new budget aimed at supporting small businesses. The following measures were also announced by Mr Sunak:
- Small businesses with a rateable value of below £15,000 will be entitled to a grant of £3,000.
- Sunak has provided £2 billion of statutory sick pay rebates for businesses that have fewer than 250 employees. This will allow the businesses to claw back the costs of providing Statutory Sick Pay to those employees that have been off work due to the coronavirus. Mr Sunak confirmed this will apply to “all those who are advised to self-isolate” regardless of whether or not they have shown signs or symptoms of the coronavirus.
- Introduction of a temporary coronavirus business interruption loan scheme which allows banks to offer loans up to a maximum of £1.2 million to help support small and medium sized businesses.
This is not set to be the end of reforms for business rates with the Chancellor confirming that the entire business rates system is to be reviewed, with a final report to be published in the autumn.
It was not, however, all good news, with Mr Sunak announcing that the planned cut to Corporation Tax from 19% to 17% has been scrapped.
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