2020 Budget: what the updates mean for businesses

“We will support jobs, we will support incomes, we will support businesses, and we will help you protect your loved ones. We will do whatever it takes.”

Comforting words from Rishi Sunak, Chancellor of the Exchequer, when he spoke of the latest announcements to the Government Budget on 17th March. For the original Budget 2020 allocations created to support small businesses, you can check our coverage from the Chancellor’s first statement on 11th March. 

In his first announcement, he set out the first stage of the Government’s economic response to help cushion the blow from COVID-19 – “a £30bn package of support for people and businesses.”

Now, in the latest announcement, the Chancellor declared another £330bn guaranteed funding to help businesses. The government-backed and guaranteed loans are equivalent to a total of 15% of our GDP. 

Support beyond this was announced in the form of two key government schemes: firstly, a lending facility agreed with the Bank of England to provide cheap, accessible funds to meet short-term debt; and secondly, an extension to the new Coronavirus Business Interruption Loan Scheme.

The extension to the scheme has taken the total funding from £1.2m to up to £5m for SMEs. The loans will not require interest payment for the first six months and will be set up and available as early as next week. 

Beyond access to finance, Chancellor Sunak reported on new measures to help businesses with cash flow and fixed costs. While it is possible for companies with insurance that covers pandemics to claim on their policy, many smaller sized businesses don’t have insurance.

To battle this, the Government is going further than the previously announced business rates scrappage for companies in the hospitality, leisure and retail industries with a rateable value of >£51,000. Now, these companies also have access to an additional grant of up to £25,000 per business. 

Additionally, all businesses in those sectors are now on a year’s holiday from business rates, irrespective of their value. That means no leisure, hospitality or retail company will need to pay business rates for 12 months.

The previously declared £3,000 cash injection for some of Britain’s small businesses has been increased to £10,000 per company, bringing the total in tax cuts and government grants to £20bn this financial year. 

Chancellor Sunak closed his announcement by saying “when I said in the Budget that we will do everything we can to keep this country, and our people, healthy and financially secure – I meant it.”

As the COVID-19 situation evolves, further business-based Budget announcements are coming soon. Remember to check in for the latest updates.