Budget 11 March 2020
Statutory Sick Pay (SSP) and Coronavirus/COVID-19
SSP is usually paid to employees from day four onwards, i.e. there are three “waiting days”. The three waiting days have been suspended and employees will be entitled to SSP from Day 1. This applies if employees have to self-isolate due to Coronavirus.
Currently the cost of SSP is borne by the employer. Employers with fewer than 250 employees will now be able to reclaim SSP in full for a maximum of two weeks per employee. As at the time of writing, I haven’t found the date that this provision becomes effective. Software developers will have to burn the midnight oil to change the way SSP is handled by their programs if this is to be implemented immediately.
Employees will have to obtain a “Fit Note” by calling 111.
Small Business Rate Relief
Any business qualifying for Small Business Rate Relief (where the rateable value is less than £12,000) will be allowed a £3,000 cash grant. Clarification will be needed to see if this will conflict with the Employer’s Allowance as a form of State Aid. At the time of writing, no further details are available.
Leisure sector rate relief
Businesses in the retail, leisure and hospitality sectors with a rateable value less than £ 51,000 will not have a rates bill for next year. This will apply to qualifying shops, cinemas, restaurants and hotels. The rates discount given to qualifying pubs (i.e. a rateable value below £ 100,000) will increase from £1,000 to £5,000 for one year only from 1 April 2020.
A review into the long-term future of business rates is to be launched.
The rate of corporation tax will be held at 19%.
Tax rates and allowances
All other rates and tax bands remain the same for next tax year. Class 2 NI contributions payable by the self-employed increases from £ 2.95 pw to £ 3.05pw. Class 2 NI is calculated on your self-assessment tax return.
The Chancellor reduced the lifetime limit from £10m to £1m.
The employer’s allowance will increase from £ 3,000 pa to £ 4,000 pa.
The employer’s allowance reduces the employer’s NI contributions by a maximum of £ 3,000 (and now £4,000) payable in any one tax year.
From April 2020, the point at which you will start to pay NI will be increased from £ 8,628 to £ 9,500 – this applies to both Class 1 (employee contributions) and Class 4 (self-employed contributions).
The Government’s ambition is to increase this to £ 12,500 – in line with the current personal allowance for income tax.
Time to pay
The Chancellor announced an easing of the time to pay system whereby businesses can request time to pay their taxes if in financial distress. An additional 2,000 members of staff will be available to cover the dedicated phone lines.
Coronoavirus Business Interruption Loan Scheme
SMEs can apply for a Government guaranteed loan via their bank. The Government will guarantee up to 80% of a working capital loan. You will still have to meet the bank’s lending criteria.
National Living Wage
This is already due to increase for over 25s on 1 April 2020 by 51p, from £ 8.21ph to £ 8.72ph.
Other increases can be found here
As has been widely expected, the rate of VAT on sanitary products will be reduced from 5% to 0% on 1 January 2021.
VAT on e-books will be set at 0% on 1 December 2021.
Stamp Duty Land Tax
Non-residents will incur an additional 2% Stamp Duty Land Tax surcharge.
It seems that all duties have been frozen, including fuel duty.
However, Red diesel fuel duty relief will be removed except for agriculture, rail, heating and fishing purposes.
The Chancellor has tasked HMRC to increase a further £4.4bn in additional tax through more Enquiry work.
Full details can be read here