With Coronavirus taking the main stage at yesterday’s Budget, the first since Autumn 2018, it was easy to miss some of the other announcements made by the Chancellor, only weeks into the job.
UK employees have already begun receiving statutory sick pay (SSP) from day one, payable by employers, to help contain coronavirus and not penalise those who self-isolate. However, the Chancellor has announced that businesses with fewer than 250 employees can reclaim the cost for the full 14 days of isolation.
National living wage and national minimum wage saw increases in what the government called “the biggest cash increase ever”. Something that many businesses warned would put pressure on them in a time of great economic uncertainty and urged for the government to offset these costs by reducing others.
The Employment Allowance for Employer National Insurance Contributions is increasing from £3,000 to £4,000. This means eligible businesses and charities will be able to claim a greater reduction on their Secondary Class 1 National Insurance Contributions liability.
This measure supports businesses by providing relief of up to £4,000 on their employer secondary Class 1 National Insurance Contributions liabilities. This is expected to reduce around a further 65,000 businesses’ National Insurance Contributions bill to £0, and further allow small, growing enterprises to take on staff without incurring additional National Insurance Contributions liabilities.
This is in addition to the 590,000 businesses whose National Insurance Contributions bill is effectively reduced to nil under the current level of the Employment Allowance.
It was announced that the government will launch a fundamental review of business rates in time for the autumn.
The government has temporarily abolished business rates for thousands of small businesses as part of emergency measures. Tens of thousands of retail, leisure and hospitality companies with a rateable value of less than £51,000 will not pay any business rates this year. These sectors are expected to be among the worst hit as people cut back on travel during the Coronavirus outbreak.
Entrepreneurs relief, a tax break allowing entrepreneurs selling their businesses to pay a reduced tax rate of 10% up to £10 million is being reduced by 90%. Under the revamp, business sellers will pay 10% on lifetime gains of up to £1m. Anything above £1m, business owners will be charged at the standard capital gains tax rate which is 20% for higher-rate taxpayers.
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