PLASA Members’ Area

6 updates for business and individuals from the Budget 2020

On Wednesday the Government outlined some measures to help in the wake of COVID-19. We appreciate this is a very difficult time for everyone and we want to try to help you understand the help and support available.

It will take time for full guidance to be available and the situation is ever changing, but below is a summary of the six essential points to be aware of.

1. Sick pay

The Government has said statutory sick pay will be paid from day one of absence not day four. They have also said that small and medium sized businesses (under 250 employees) can claim 14 days of SSP back (there are rules around eligibility – see section 1.32).

They have also said that SSP will cover:

  • Individuals who are unable to work because they have been advised to self-isolate.
  • People caring for those within the same household who display COVID-19 symptoms and have been told to self-isolate.

2. What about those who are self-employed?

The Government has also sought to help self-employed by changing when you can claim “Employment and Support Allowance and Universal Credit”.

The Government is making it quicker and easier to receive benefits:

  • ‘New style’ Employment and Support Allowance will be payable for people directly affected by COVID-19 or self-isolating according to Government advice from the first day of sickness, rather than the eigth day.
  • People will be able to claim Universal Credit and access advance payments where they are directly affected by COVID-19 (or self-isolating) without the current requirement to attend a job centre.
  • For the duration of the outbreak, the requirements of the minimum income floor in Universal Credit will be temporarily relaxed for those directly affected by COVID-19 or self-isolating according to Government advice for duration of the outbreak, ensuring self‑employed claimants will be compensated for losses in income.

3. Business Rates Reliefs

The Government has already announced the Business Rates retail discount will be increased to 50% in 2020-21. To support small businesses affected by COVID-19 the Government is increasing it further to 100% for 2020-21.

The relief will also be expanded to the leisure and hospitality sectors. PLASA is seeking clarity on what types of business this includes. However, Chancellor Rishi Sunak has said the relief would be offered to:

“museums, art galleries, theatres, caravan parks, gyms, small hotels, sports clubs and night clubs” (BBC)

The Government has also already announced the introduction of a £1,000 Business Rates discount for pubs with a rateable value below £100,000 in England for one year from 1 April 2020. To support pubs in response to COVID-19 the discount will be increased to £5,000.

4. Small business grant funding 

The Government recognises that many small businesses pay little or no business rates because of Small Business Rate Relief (SBRR). To support those businesses, the Government will provide £2.2 billion of funding for Local authorities in England.

This will provide £3,000 to around 700,000 businesses currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs.

For a property with a rateable value of £12,000, this is one quarter of their rateable value, or comparable to three months of rent. Most properties that are eligible for SBRR will have a lower rateable value. So this will represent an even greater proportion of their annual rent.

5. Time to Pay 

The Government will ensure that businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs.

Her Majesty’s Revenue and Customs (HMRC) has set up a dedicated COVID-19 helpline to help those in need, and they may be able to agree a bespoke Time to Pay arrangement.

These tailored arrangements will give a business the time it needs to pay HMRC to support their recovery while operating through any temporary financial challenges that occur. To ensure ongoing support, HMRC have made a further 2,000 experienced call handlers available to support firms when needed.

HMRC will also waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to COVID-19.

6. Coronavirus Business Interruption Loan Scheme 

The Government will launch a new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, to support businesses to access bank lending and overdrafts.

The Government will provide lenders with a guarantee of 80% on each loan (subject to a per lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.

The Government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £1.2 million in value. This new guarantee will initially support up to £1 billion of lending on top of current support offered through the British Business Bank.