12.03.2020: The 2020 Budget
Dear valued client,
As you might have already heard by now, the Chancellor has announced the new budget for 2020 onwards. As your accountants, we thought we’d let you know the key points from the new budget and what they may mean for your business;
Firstly, the Chancellor has announced that small businesses who are dealing with employees off sick due to the Coronavirus, will be refunded for the statutory sick pay if the time period exceeds more than 14 days. This includes any business with less than 250 employees, so you are definitely going to fall into this category! The sick pay will cover all employees off sick from their first day, even including those self-isolating.
If your business has been affected by the Coronavirus, the government have confirmed that small businesses will have full access to their 'business interruption' loans with up to £1.2 million available.
The chancellor went on to say that businesses in the retail, leisure and hospitality industries with a rate-able value below £51,000 will have their business rates abolished but has also promised an overall review of the current business rates scheme this autumn.
The ‘Time to Pay’ scheme with HMRC will most likely be affected by the Coronavirus outbreak too, so the government have stated that they will allow small businesses to spread out payments which are due if they are currently struggling financially.
Entrepreneur’s relief lifetime limit will also be reduced from £10 million to just £1 million and this is because the government doesn’t believe its very effective at the moment, but don’t panic as 80% of small businesses will be unaffected by this new regime!
Furthermore, the Corporation tax is set to be frozen, remaining at 19% and will not be cut at all this year after overlooking the previous plan to cut it down to 17%.
VAT on books and newspapers will be ditched, knocking off 20% off the price. This will include e-books, e-newspapers, e-magazines and academic e-journals and will come into force from the first of December 2020.
The research and development tax credit for small companies has also been increased from 12% to now 15%, helping small businesses across the country grow and expand with more staff members.
The above changes may or may not affect you and your business and if you are still unsure what these may mean for you after reading this, we are here to help advise you so please don’t hesitate to contact us if you have any questions!
Best, Dunnell Accounting