Chancellor Rishi Sunak launched his budget by warning of a significant disruption to the UK economy caused by the coronavirus outbreak, but promised that its effects would be temporary and the country “will get through this together”.
He pledged more money to battle the Covid19 crisis and extra investment in infrastructure, business support including more support for regional Growth Hubs, business tax relief, a significant boost in R&D spending, saving but reducing entrepreneur's relief and freezing duty on booze and fuel.
For list of key budget pledges, scroll down to the bottom of this story.
Dame Carolyn Fairbairn, the Director General of the CBI, praised the chancellor's first budget. "In deeply challenging times the Chancellor has worked against the clock to deliver two Budgets in one: a first for national resilience today and a second for economic ambition tomorrow. It’s a bold Budget at scale, coordinated with the Bank of England, which will help people and business through tough times."
National Chairman of the Federation of Small Businesses (FSB), Mike Cherry, added: “This is a pro-small business Budget, which has delivered a high streets bonus, a series of Conservative manifesto promises to small businesses, and emergency steps to support small firms through the coronavirus outbreak."
Dame Carolyn added: “While the response to Covid19 is urgent, it is very good to see this Budget’s focus on innovation and infrastructure. The Chancellor has listened to many calls from CBI members, with decisive action on vital long-term issues.
“The significant uplift in R&D funding, creation of a UK version of ARPA, a fundamental review of business rates and spending promises on infrastructure will all bring real benefits to people, business and communities.
Ian Mean, Gloucestershire Director of Business West, added: "What I liked about the package – and I am certainly not an economist – was that it seemed to be very much joined up – starting with an announcement early morning before he stood up in the Commons that interest rates would be cut to virtually zero – from 0.75% to 0.25%."
Hayley Simmons, head of insolvency at Shaw Gibbs, Oxford-based accountants and business advisers, added:“It’s a welcome relief that the Chancellor did not abolish the Entrepreneur Relief all together. However the changes announced today, which have already taken effect from midnight last night, will have a detrimental impact on those who were unable to take advantage of the reliefs in time. They will suffer monetary losses as a result. Our advice to those now contemplating retirement or a sale of either, all or part, of their business is to seek advice to further explore other options.”
Dame Carolyn of the CBI also highlighted the chancellor's powerful incentives to get businesses investing, increasing the R&D tax credit and the Structures and Buildings Allowance. "The £5bn of new export loans will encourage the best of UK business to look to new global markets," she said.
“Overall, today’s Budget is a powerful signal to firms at home and abroad that the UK can and will manage the immediate challenges and long-term opportunities in parallel.”
The FSB added that covering the cost of Statutory Sick Pay and emergency measures for the self-employed are particularly welcome.
Federation of Small Businesses (FSB), Mike Cherry, added: “Suspending business rates for small high street firms is a huge bonus for our town centres and high streets. Together with extra cash for those that already qualify for small business relief, this shows a real commitment to supporting small businesses at the heart of communities. The case for fundamental reform to bring down the burden of such a regressive tax on bricks-and-mortar businesses is now stronger than it has ever been, and FSB is ready to help the Government deliver this.
“One of FSB’s main asks at this Budget was a cut to the Jobs Tax, an easing of the cost of employer National Insurance, and we are very pleased to see such a pro-growth, pro-employment measure delivered for all small employers. A National Insurance holiday for small firms employing military service leavers will incentivise tapping the skills and potential of those joining the workforce after a career in the armed forces.
“The continued freeze on fuel duty for another year is a sensible measure which will help those small businesses which are reliant on vehicles. While a move to greener modes of transport is an important longer-term goal, now was not the time to hike tax on hard-working entrepreneurs who have no choice but to drive for their business to function.
“The sensible compromise on Entrepreneurs’ Relief is one that we have proposed and championed, and everyday entrepreneurs will be pleased to hear the Chancellor say that he has listened to FSB on this.
“This has been a deliberately pro small business first budget for the Chancellor. We hope it is the start of things to come.”
Richard Rose, Head of BDO LLP in the Midlands, said: “Today’s Budget made an encouraging start towards the Government promise of ‘levelling up’. Significant pledges were made around infrastructure investment, enhanced devolution and investment in education across the regions.
“For entrepreneurs, the decision to lower the threshold for entrepreneur’s relief rather than abolish it is a welcome message for the 80% of business owners who will remain unaffected by the change. Alongside this came the commitment to continue to invest in ideas by encouraging R&D and green growth."
Key budget business highlights
In response to the Coronavirus emergency:
Tax
Further budget announcements
Businesses seeking support to start up, grow and export.
Entrepreneurs’ relief
R&D
Other announcements
Education
Housing
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