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Spring Budget 2020: The Chancellor’s fight back against Coronavirus

“The Budget takes place against the backdrop of the global outbreak of COVID-19…The Budget sets out a plan to support public services, individuals and businesses that may be affected by COVID-19.” Chancellor, Rishi Sunak. 

The Chancellor announced a short term fiscal stimulus totalling £30 billion, including welfare and business support, sick-pay changes and local assistance. This includes £7 billion for business and £5 billion for the NHS – the government’s number one spending priority.  

It was anticipated that the government would introduce measures to help people and businesses in the current economic climate following the virus outbreak and this followed the Bank of England’s reduction in interest rates from 0.75% to 0.25% earlier on Budget Day - the biggest move in a single month since March 2009.

So, what is the government implementing?

About the author

James Currie

+44(0)20 7556 1319
Curriej@buzzacott.co.uk

The Chancellor announced a short term fiscal stimulus totalling £30 billion, including welfare and business support, sick-pay changes and local assistance. This includes £7 billion for business and £5 billion for the NHS – the government’s number one spending priority.  

It was anticipated that the government would introduce measures to help people and businesses in the current economic climate following the virus outbreak and this followed the Bank of England’s reduction in interest rates from 0.75% to 0.25% earlier on Budget Day - the biggest move in a single month since March 2009.

So, what is the government implementing?

Welfare - Statutory Sick Pay  (SSP)

In the wake of the virus outbreak, the government had already issued guidance to employers with respect to sick notes from the GP; the Budget has introduced a temporary alternative which can be used for the duration of the COVID-19 outbreak.  Other measures introduced include:

  • SSP will be available from day one for employees who are self-isolating. Those employers with fewer than 250 employees will be able to reclaim in full the amount paid for up to 14 days per employee.
  • Sick notes to support the absence for self-isolating can be obtained through the NHS website and NHS 111 online. After answering a few questions, an isolation note will be emailed to the user. If the user does not have an email address, they can have the note sent to a trusted person or to their employer. GPs will not issue sick notes for this type of absence.   
  • The requirement for employees in receipt of SSP to attend a Job Centre to claim additional benefits will be relaxed and the claim can be made either by phone or online.
  • Workers and those who are self-employed who are not entitled to SSP, will be able to claim benefit from day one instead of day eight.
  • Up to 2 million small businesses (fewer than 250 employees) who have incurred extra costs of paying COVID-19 SSP will be eligible for rebates. This could be in the region of £2 billion.

Business support

The government will support businesses that experience increased costs or disruptions to their cashflow. Assistance announced include:

  • Business Rates are to be abolished altogether this year for smaller retailers and many smaller hospitality businesses, in a tax cut worth more than £1 billion.
  • Smaller pubs will be entitled to a Business Rates discount of £5,000.
  • Any company eligible for Small Business Rates Relief will be allowed a £3,000 cash grant – a £2 billion injection for 700,000 small businesses.
  • A dedicated helpline for those who need a deferral period on their tax liabilities.
  • The Chancellor announced £1 billion of lending via a government-backed loan scheme.

What should you do?

The government states that the impact of COVID-19 is temporary but it is creating uncertainty and clearly represents a downside risk to the economic forecast. They also comment that productivity remains low compared to other countries and unevenly distributed.  

If you or your business is experiencing the effects of the virus, you should ensure that you claim what you are entitled to, as the support should be there.

Read more on the Budget here.

This article was last updated on 21 March 2020.

 

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Many employers faced with a decline in their business at present are uncertain about what action to take so far as their employees are concerned. Talk to our respective tax and employment experts for advice on your situation. If you have a query about any of the topics mentioned in this article, please fill in the form below and one of our experts will be in touch.

 

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