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17 March 2020
In the 2020 Budget, Chancellor of the Exchequer, Rishi Sunak, has announced a £12 billion package of temporary and targeted measures during the coronavirus (COVID-19) outbreak, including cutting business rates, introducing loan schemes and extending statutory sick pay entitlements.
The treasury stated in an executive summary within the budget: “The impact of the outbreak of COVID-19 on the UK economy is highly uncertain and while the effect could prove significant, it is expected to be temporary.”
In a statement from the AOP on the impact of coronavirus, policy director, Tony Stafford, said: “It is increasingly clear that COVID-19 is likely to have a significant impact on optical practices, and on other primary healthcare providers and businesses.”
Mr Stafford highlighted the “welcome measures” included in the budget “to help businesses deal with the implications.”
“As details emerge we’ll update our member guidance to explain how optical practices can benefit,” he continued.
In order to support small businesses affected by COVID-19, the Government has announced it is further increasing the business rates retail discount for properties with a rateable value below £51,000 from 50% to 100% for 2020–21.
For those smaller businesses that pay little or no business rates due to the small business rate relief (SBRR), the Government announced it would provide £2.2 billion of funding for local authorities in England to help these businesses to meet ongoing costs.
A new temporary Coronavirus Business Interruption Loan Scheme will also be launched in the next few weeks to support businesses to access bank lending and overdrafts. The scheme will be delivered by the British Business Bank.
The HMRC has also set up a dedicated COVID-19 helpline to support businesses and self-employed individuals in financial distress and with outstanding tax liabilities.
Those with concerns can receive advice and support, and those eligible may be able to agree a Time To Pay arrangement, providing businesses time to pay HMRC to support their recovery while operating through any temporary financial challenges.
Up to 2000 call handlers have been made available to provide help and support.
The HMRC has said it will also waive late payment penalties and interest where a business experiences difficulties contacting HMRC or paying taxes due to COVID-19.
Outside of the COVID-19 measures, the Government has announced it will launch a review of business rates.
The review will consider further reforms to the system with a call for evidence set to be published in spring. The review is then due to report in the autumn.
AOP Board Member and owner of Lunettes Opticians, Tushar Majithia told OT: “The announcement of a 12 month suspension on business rates for shops is a welcome announcement for optical practices.”
He added: “Although larger groups are unlikely to benefit from this measure, it is encouraging that the Chancellor has indicated that the business rates system will be reviewed to make the tax fairer for bricks and mortar businesses.”
“This is something the AOP have campaigned for, calling for a fairer rating system to protect the High Street and community optical practices,” Mr Majithia continued.
The AOP released a statement last year calling for reforms to the business rates system “to create a fairer regime that reflects the current retail landscape” and to protect High Street practices.
In a statement, calling the Budget a “pro-small business budget,” the National Chairman of the Federation of Small Businesses (FSB), Mike Cherry said: “Suspending business rates for small high street firms is a huge bonus for our town centres and high streets.”
“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,” he continued.
The new bill will temporarily allow SSP to be payable from the first day of illness, instead of day four for affected individuals or those self-isolating.
In the budget, the treasury wrote: “The government will support small and medium-sized businesses and employers to cope with the extra costs of paying COVID-19 related SSP by refunding eligible SSP costs.”
Employers with fewer than 250 employees (as of 28 February) will be eligible, and employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19 and according to the new eligibility criteria.
The eligible period for the scheme will commence from the day on which the regulations extending SSP come into force and the refund will be limited to two weeks per employee.
Further expanding on this in the Budget speech, the Chancellor said: “That could provide over £2 billion for up to two million businesses,” adding that the move would “significantly ease the burden on businesses.”
For those not eligible for SSP, such as self-employed individuals or those earning below the lower earnings limit, the Government suggested the “best” system of support would include the ‘new style’ employment and support allowance and universal credit.
The allowance will be payable for people directly affected by COVID-19, or self-isolating to government guidelines, from the first day of sickness rather than the eighth day.
For the duration of the outbreak, the requirements of the minimum income floor in Universal Credit will be temporarily relaxed for those directly affected by COVID-19 or self-isolating, which the government suggests will ensure self-employed claimants will be compensated for losses in income.
Commenting on the measures announced by the Government regarding sick pay support, Mr Oster said: “The adjustments made to SSP and the refunds in relation to COVID-19 sickness leave and self-isolation will reduce the burden on businesses who will no doubt struggle during these uncertain times.”
For those individuals who are self-employed, Mr Oster commented: “Self-employed workers who aren’t eligible for SSP, will be eligible for employment support allowance from day one instead of after a week as previously.”
“With practices potentially having to close, this could have a knock-on effect on self-employed locums. This measure could go some way to protecting those practitioners,” he continued.
Commenting on these adjustments, The Federation of Small Businesses’ Mike Cherry said: “Covering the cost of SSP and emergency measures for the self-employed are particularly welcome.”
He continued: “Removing the minimum income floor for those on Universal Credit will bring help to those working hard to keep their businesses going. These are vital contingencies for the UK’s 5.8 million-strong small business and self-employed community.”
The treasury stated in an executive summary within the budget: “The impact of the outbreak of COVID-19 on the UK economy is highly uncertain and while the effect could prove significant, it is expected to be temporary.”
In a statement from the AOP on the impact of coronavirus, policy director, Tony Stafford, said: “It is increasingly clear that COVID-19 is likely to have a significant impact on optical practices, and on other primary healthcare providers and businesses.”
Mr Stafford highlighted the “welcome measures” included in the budget “to help businesses deal with the implications.”
“As details emerge we’ll update our member guidance to explain how optical practices can benefit,” he continued.
Supporting businesses during COVID-19
In order to support small businesses affected by COVID-19, the Government has announced it is further increasing the business rates retail discount for properties with a rateable value below £51,000 from 50% to 100% for 2020–21. For those smaller businesses that pay little or no business rates due to the small business rate relief (SBRR), the Government announced it would provide £2.2 billion of funding for local authorities in England to help these businesses to meet ongoing costs.
A new temporary Coronavirus Business Interruption Loan Scheme will also be launched in the next few weeks to support businesses to access bank lending and overdrafts. The scheme will be delivered by the British Business Bank.
The HMRC has also set up a dedicated COVID-19 helpline to support businesses and self-employed individuals in financial distress and with outstanding tax liabilities.
Those with concerns can receive advice and support, and those eligible may be able to agree a Time To Pay arrangement, providing businesses time to pay HMRC to support their recovery while operating through any temporary financial challenges.
Up to 2000 call handlers have been made available to provide help and support.
The HMRC has said it will also waive late payment penalties and interest where a business experiences difficulties contacting HMRC or paying taxes due to COVID-19.
Business rates review
Outside of the COVID-19 measures, the Government has announced it will launch a review of business rates. The review will consider further reforms to the system with a call for evidence set to be published in spring. The review is then due to report in the autumn.
It is encouraging that the Chancellor has indicated that the business rates system will be reviewed to make the tax fairer for bricks and mortar businesses.
AOP Board Member and owner of Lunettes Opticians, Tushar Majithia told OT: “The announcement of a 12 month suspension on business rates for shops is a welcome announcement for optical practices.”
He added: “Although larger groups are unlikely to benefit from this measure, it is encouraging that the Chancellor has indicated that the business rates system will be reviewed to make the tax fairer for bricks and mortar businesses.”
“This is something the AOP have campaigned for, calling for a fairer rating system to protect the High Street and community optical practices,” Mr Majithia continued.
The AOP released a statement last year calling for reforms to the business rates system “to create a fairer regime that reflects the current retail landscape” and to protect High Street practices.
In a statement, calling the Budget a “pro-small business budget,” the National Chairman of the Federation of Small Businesses (FSB), Mike Cherry said: “Suspending business rates for small high street firms is a huge bonus for our town centres and high streets.”
“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,” he continued.
Sickness entitlement changes during COVID-19
As part of the measures included in the Budget, the Chancellor announced that statutory sick pay (SSP) would be extended for eligible individuals diagnosed with coronavirus, or those unable to work as they are self-isolating in line with government advice.The new bill will temporarily allow SSP to be payable from the first day of illness, instead of day four for affected individuals or those self-isolating.
In the budget, the treasury wrote: “The government will support small and medium-sized businesses and employers to cope with the extra costs of paying COVID-19 related SSP by refunding eligible SSP costs.”
Employers with fewer than 250 employees (as of 28 February) will be eligible, and employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19 and according to the new eligibility criteria.
The eligible period for the scheme will commence from the day on which the regulations extending SSP come into force and the refund will be limited to two weeks per employee.
Further expanding on this in the Budget speech, the Chancellor said: “That could provide over £2 billion for up to two million businesses,” adding that the move would “significantly ease the burden on businesses.”
For those not eligible for SSP, such as self-employed individuals or those earning below the lower earnings limit, the Government suggested the “best” system of support would include the ‘new style’ employment and support allowance and universal credit.
The allowance will be payable for people directly affected by COVID-19, or self-isolating to government guidelines, from the first day of sickness rather than the eighth day.
For the duration of the outbreak, the requirements of the minimum income floor in Universal Credit will be temporarily relaxed for those directly affected by COVID-19 or self-isolating, which the government suggests will ensure self-employed claimants will be compensated for losses in income.
Covering the cost
TWD Accountants’ managing director, Ben Oster, told OT he had seen a level of concern from the optical sector related to taking business decisions during the outbreak. He said: “Having only just left the EU, and with businesses hoping for a return to certainty, this is a setback.”The adjustments made to SSP and the refunds in relation to COVID-19 sickness leave and self-isolation will reduce the burden on businesses who will no doubt struggle during these uncertain times.
Commenting on the measures announced by the Government regarding sick pay support, Mr Oster said: “The adjustments made to SSP and the refunds in relation to COVID-19 sickness leave and self-isolation will reduce the burden on businesses who will no doubt struggle during these uncertain times.”
For those individuals who are self-employed, Mr Oster commented: “Self-employed workers who aren’t eligible for SSP, will be eligible for employment support allowance from day one instead of after a week as previously.”
“With practices potentially having to close, this could have a knock-on effect on self-employed locums. This measure could go some way to protecting those practitioners,” he continued.
Commenting on these adjustments, The Federation of Small Businesses’ Mike Cherry said: “Covering the cost of SSP and emergency measures for the self-employed are particularly welcome.”
He continued: “Removing the minimum income floor for those on Universal Credit will bring help to those working hard to keep their businesses going. These are vital contingencies for the UK’s 5.8 million-strong small business and self-employed community.”
NHS funding and National Insurance
As part of the wider 2020 Budget, the government has announced plans to increase funding for the NHS.
The budget outlined that over £6 billion of funding will be provided to strengthen the NHS, investing in increased staffing, hospitals and GP surgery appointments.
The Budget also confirmed an increase in the National Insurance contributions thresholds for employees and the self-employed.
The increase to the Employment Allowance to £4000 will mean small businesses can take on extra staff – up to four full-time employees on the National Living Wage without paying any employer National Insurance contributions. The Government said this would benefit around 510,000 businesses, including around 65,000 businesses which will be taken out of paying these entirely.
OT endeavours to keep the most up-to-date news on our website and this information was correct when published. However, the situation regarding COVID-19 is rapidly evolving. Please check OT’s rolling optics-specific coverage for the latest news and guidance on COVID-19.
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