As part of a wide package of financial measures designed to support the UK economy through this turbulent period, Chancellor Rishi Sunak unveiled a £350bn support package last night. Our Chief Accountant, Emily Coltman FCA, takes a look at exactly what this means for small businesses.
IR35 reforms in the private sector delayed
In an unexpected U-turn, the government has announced that its planned reforms to IR35 legislation will be delayed for a year. The reforms, which will affect contractors who work in the private sector, were due to be implemented on 6th April this year but will now come into effect in April 2021. The delay should come as welcome news to contractors who work in the private sector for clients and engagers of all business sizes.
Changes for pubs and restaurants
Pubs and restaurants will be granted fast-track planning permission to serve takeaway hot food and drinks. This measure is intended to help these businesses survive at a time when customers have been advised to stay at home.
Retail, hospitality and leisure industry business rates
Businesses in the retail, hospitality and leisure industries that pay business rates will not have to pay these rates in the 2020/21 tax year and will potentially be eligible for a £25,000 grant. The details on how to claim this grant aren’t clear yet, but we’ll provide information as soon as it becomes available.
Small business rate relief
Smaller businesses that operate from properties with a rateable value of £15,000 or less (making them eligible for small business rate relief) will be entitled to a grant of up to £10,000 each. This is an increase from the £3,000 grant announced in last week’s Budget. The grant will also be available to businesses that qualify for rural rate relief. Businesses do not need to apply for these grants; their local authorities will contact them directly.
Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme, announced last week in the Budget, has now been extended to offer loans of up to £5 million, with no interest due for the first six months. At the moment, we aren’t privy to a huge amount of information about what the scheme will entail. However, the government’s website currently refers to it as a scheme to “support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance”. The temporary Coronavirus Business Interruption Loan Scheme will be delivered by the state-owned British Business Bank and according to the bank’s website, the loans should be available from 23rd March.
Support for the self-employed
Sadly, no specific support has been announced for the self-employed, who cannot access the Statutory Sick Pay reclaim announced in the Budget. We’re monitoring developments closely here at FreeAgent and, as always, we’ll let you know if the situation changes.
To learn more about what the coronavirus crisis could mean for your business and to stay up to date with the latest news, take a look at our small business coronavirus hub.