Wednesday’s budget was what many describe as a “pro-small business budget” – which is great news for SME’s who may want to put the monies saved as a result into growing their business. Of course, as a business grows, don’t forget the importance of regularly reviewing your small business insurance to ensure that it continues to offer you the most appropriate cover.
At Protectivity, we provide a wide range of what we believe are cost-effective insurance solutions for small businesses including Therapy Insurance, Pet Business Insurance and, Hairdressing and Barbers Insurance.
Here we discuss what the practical measures of this budget are likely to mean for your small business.
The Spring Budget was set against a background in which the Chancellor promised a total of £30 billion in money which the government would pump into the economy overall – the highest amount in any budget for many a year.
Thousands of small businesses are likely to benefit from the temporary suspension – for one year – of business rates.
The Financial Times estimated that around half of all the UK’s small and medium sized businesses are likely to benefit from this concession which abolishes business rates on premises with a rateable value below £51,000.
The calculation of business rates is relatively complicated but is currently imposed on businesses whose premises have a rateable value higher than £15,000. Relief from that financial burden is going to be welcomed by many thousands of small businesses. If you’re running a barber shop or hairdressing salon, for example, you may be better able to keep your head above water without having to pay business rates for a year. Or, you could use the money to expand or improve your business.
Pubs in England with a rateable value of less than £100,000 will also receive a business rate discount of £5,000 for the tax year 2020 to 2021 – up from the current discount of £1,000 – adds the Daily Telegraph.
With supply chains under increasing pressure and growing numbers of people unable to work while they self-isolate from the effects of the coronavirus, many small businesses are going to feel the financial strains of the emergency.
To help them – for whom cash flow is the secret to keeping their business alive – the budget proposes the availability of government-backed loans worth up to £1.2 million a time. In addition to this coronavirus disruption loan scheme, especially small claims may be met by grants of up to £3,000 each.
The loan scheme will work through government-guaranteeing loans that cover up to 80% of business losses free of fees, so that banks have the necessary confidence to advance the funds.
These measures are estimated to be worth a total of £2 billion and will benefit some 700,000 small and medium-sized businesses.
Anticipating that a growing number of people will be affected by the coronavirus, the Chancellor insisted that those who are unable to work – because of their need to self-isolate – must be able to rely on a secure safety-net to fall back on.
For those in employment, that will mean ensuring that statutory sick pay is available to everyone who self-isolates, even if they do not have the symptoms of the disease but have obtained a virtual sick note through the NHS’ 111 telephone service.
Businesses employing fewer than 250 people will be able to reclaim statutory sick pay for those out of work through the coronavirus for up to 14 days.
The self-employed, of course, do not qualify for statutory sick pay, but they will be supported through benefits and universal credits. By making an additional £500 million available, the self-employed will be able to claim benefits from day one and universal credit payments will no longer be subject to minimum income levels.
If you are a self-employed dog walker or dog groomer, for example, this means government support continues to be available if you cannot work while in self-isolation.
Coinciding with the Chancellor’s budget proposals, the Bank of England also announced a reduction in the base rate from 0.75% to 0.25%.
The reduced cost of borrowing will make life easier for all manner of small and medium-sized businesses.
If increased pressures – and opportunities – mean that you need to spruce up or renovate the offices, treatment facilities or spa in which you offer any type therapy, therefore, any borrowing that may be necessary is going to be significantly cheaper.
To read more about what happened in the Budget, you can visit the Government website.