Coronavirus relief dominates Budget 2020
Date Published: March 12, 2020
We followed the Budget closely yesterday. Coronavirus dominated this Budget from Rishi Sunak. Ahead of the Chancellor taking to the box, BBC Political Editor Laura Kuenssberg said, “This is going to feel a bit like an emergency budget.” Certainly the opening half an hour did, with extraordinary measures introduced to help the country and economy through a potentially dramatic reduction in output.
Mr Sunak described COVID-19 as a “temporary disruption to the economy” that could see a fifth of the country’s workforce absent at one time due to the virus.
While the government previously announced a measure to ensure workers would receive statutory sick pay from day one of illness, this doesn’t reassure those in the gig economy or the self-employed. Mr Sunak said it would be “quicker and easier” for these workers to get help through benefits.
All in all, a £30bn stimulus package has been announced to help the country’s economy through the current COVID-19 situation. This includes:
- A loan scheme for SMEs to borrow up to £1.2 million to cover up to 80% of losses with no fees.
- A £3,000 cash grant for small firms eligible for small business rates relief.
- 100% retail rates relief for the fiscal year ahead for retail business with a rateable value of up to £51,000.
- The retail rate relief measures are to extend to:
- Art galleries
- Caravan parks
- Small hotels
- B and Bs
- Sports clubs
- Night clubs
- Club houses
- Guest houses
Mr Sunak has also announced a raise of the National Insurance threshold to £9,500 from April. This represents a tax cut for 31 million people, and the Chancellor says this is a £104 saving for a “typical employee”.
He commented, “The OBR have said that today’s Budget will be the largest sustained fiscal boost for 30 years.”
Our CFO and Fellow of the ICAEW, Ian Katté, commented,
“I cannot remember a Budget quite like it. COVID-19 completely dominated Chancellor Rishi Sunak’s first Budget. During most of the speech, it seemed that he was going to finish his Budget Statement without any mention of taxation – however he did eventually get to taxes and National Insurance – much along expected lines, such as the reduction in Entrepreneurs’ Relief. There appeared to be minimal direct impact on individuals, but we must always remember that the devil is in the detail with Budgets and look out for the small print. It is hoped that by the time of the Autumn Budget the situation will be normalised!”