After a significant wait (498 days) since the last Budget – not to mention a change of Prime Minister and subsequent General Election – the scene was set for a package of fundamental changes to the UK tax system.
We will never know whether events of recent weeks had a significant impact on the wide-ranging measures announced today. However, a significant package of Coronavirus measures, which will not have been a consideration on 12 December, took centre stage. Immediate measures announced to assist with the epidemic include:
- Entitlement to Statutory Sick Pay (SSP) has been extended not just to Day 1 of sickness as previously announced, but further to Day 1 of self isolation.
- For SMEs (employers with up to 250 employees), SSP will be reimbursed to the employer, for up to two weeks, backdated for Coronavirus sick leave already taken.
- The increase of Small Business rates relief from 50% to 100% for small businesses, with exemptions also applying to the leisure and hospitality sectors.
- Bank loan guarantees to enable struggling businesses to access working capital funding up to £1.2m.
- Dedicated teams at HMRC to assist with Time to Pay arrangements in respect of taxes payable. Aside from these immediate and, hopefully, short-term measures to tackle the current difficulties faced by Small businesses and their employees, the main event of the Budget is the significant reduction in the availability of Entrepreneurs’ Relief, which cuts the lifetime gain allowance to £1m. This measure takes immediate effect. While we knew change was coming, this will have a significant impact for many business owners in the coming months and years.
