Response was swift to Chancellor Rishi Sunak’s budget and, in particular, the way it addressed the threat of Coronavirus.
Sunak described the response as “temporary, timely and targeted” and one that was drawn up with the help of the Bank of England which cut its rates by 0.5 points hours before the budget.
Key measure announced include guarantees on sick pay for those working for companies with fewer than 250 employees, a reduction in the lifetime allowance on Entrepreneurs’ Relief and a new interruption loan guarantee and the abolition of business rates.
AT A GLANCE: One-minute guide to how it affects the economy, businesses and staff pay and pensions
Reaction from the business world was swift and mixed.
Jamie Morrison, head of private client at accountancy firm HW Fisher said changes to the Entrepreneurs’ Relief (from £10 million to £1 million) were “as good as abolishing it completely and this is a huge mistake. While a sensible change following proper consultation would be welcomed, this is a step too far.
“By cutting the relief entrepreneurs will only be able to benefit up to £100k during their lifetime.
“This is not enough to drive support of creativity and entrepreneurship. Businesses need consistency and this budget needs to look beyond the immediate implications of coronavirus to provide a vision beyond the next 12 months.”
REACTION: SSP welcomed but questions remain over the welfare of the self-employed
John Ellmore, Director of Know Your Money said moves to support the self-employed offers some assurance to those that make up the ‘gig economy’ and support to help businesses implement self-isolation measures was welcoming.
He added: “That said, we are still left wondering as to what the long-term solution will be. Should the Coronavirus outbreak worsen, just how much assistance can the Government realistically provide to help businesses and their employees?
“Let’s not forget the financial challenges that self-isolation can also pose to workers. It is estimated there are 2,000,000 people in the UK with no sick pay who may not be able to afford two-weeks of self-isolation.”
REACTION: measures will raise questions from freelancers and independent contractors
Seb maley, CEO of the IR35 specialist Qdos Contractor said: “Not scrapping Entrepreneur’s Relief and increasing the National Insurance threshold doesn’t paper over the cracks.
“Given IR35 reform will go ahead, this Budget doesn’t work for freelancers and contractors who will be asking if this Government will ever deliver for the independent workforce.”
CEO mentor and, mentor to CEOs and founder of VicYourCoach.coach Peter Ryding said he welcomed the extra funding for SMEs but added: “I have been shocked at how so many, even well-known companies, are making basic mistakes because they have not adopted the right mindset and are not having the right discussions.
REACTION: businesses taking advantage of the tax holiday should be mindful of their long-term cashflow
“Unless they wake up and smell the real Corona issues soon, they may not survive long term, even if they do get through the short-term crisis.”
James Painter, head of tax at Shaw Gibbs, accountants, said of the Chancellor’s emergency tax ‘holiday’:
“No business should be penalised for doing the right thing and the short-term tax holiday for smaller business is a strategy that will help the economy stay upright during this time of real uncertainty. Certainly, HMRC will suffer a short-term hit, but it will be in the interests of avoiding a UK recession.
“The overriding concern is that the monetary impact of COVID -19 for all businesses is not yet fully understood. As such, those businesses taking advantage of the tax holiday should be mindful of their cashflow in order to ensure they have enough to pay their taxes once this hiatus is over.
REACTION: Remote working requires ‘consciously developing new working practices’
This is certainly not a reason for firms to rest on their laurels when it comes to keeping a healthy cashflow; ultimately failure to stay on top of this could be self-sabotage.”
Andrew Mawson, founder of Advanced Workplace Associates makes the point that having the odd ‘work from home’ day is one thing, but managing large numbers of people working at home for a prolonged period of time is quite another.
“There is a lot we take for granted when we’re in the office. When we’re working away, we need to consciously develop new leadership and workership practices,” he said.
“Businesses should adapt and grow or they will diminish. Whether the required change is driven by global economics, workplace cultural changes, or imminent global pandemics such as coronavirus, businesses are having to change their ways of working. Sometimes in an instant.
“There are all sorts of reasons why people can’t get to the office. The trick is to recognise that home or remote working isn’t necessarily a bad thing.”
Mike Hampson, CEO, of Bishopsgate Financial said: “Have to hand it to Sunak, from business rates to investment in infrastructure to contingency funds for employees and SMEs amid Coronavirus Crisis delivering his first budget its sensible stuff by the chancellor.
REACTION: SSP changes confirm the government’s commitment to business
“Increasing investment in R&D to a record £22bn a year, which is the fastest, and the largest increase in R&D ever higher than the US, China, France and Japan. In addition, significant investments in transport and technology infrastructure should provide an economic boost. Good news about Coronavirus loan scheme. Great support for #SME. However, will it be easy to access for SMEs to access these promised funds? As an SME getting loans could be painful, long and challenging.
“It’ll be interesting to see where the money is coming from when the details are published. This budget together with the earlier BoE interest rate cuts should combine to create a positive mood for the country in a time of uncertainty.”
Peter Webb, MD of Electronic Temperature Instruments, the UK’s largest digital thermometer manufacturer, said he welcomes the SSP announcement.
“These are unprecedented times and businesses of all sizes needed reassurance and a dose of confidence in order to stabilise their business and support their workforces,” he said. “What this does is it confirms the governments’ commitment to getting behind British business throughout this crisis and helps stabilise employment and supports productivity.”
More: markets will welcome this statement says deVere boss Nigel Green
