Spring Budget 2020
What could it mean for your business?
What does the 2020 Spring Budget announcement mean for your business?
The Chancellor announced a series of measures intended to reassure businesses about the impact of coronavirus while revealing major spending plans for the years ahead.
We have analysed the statement and summarised what it means for businesses operating in several key areas.
Click on the tabs below to find out more.
Ian Rand, CEO of Business Banking, Barclays
“This Budget showed that the Chancellor recognises that short to medium-term cash flow is critical for businesses.
“Among the many welcome measures were steps intended to alleviate the immediate impact of coronavirus and to boost the finances of the kinds of small independent businesses that are so crucial to the health of the British high street.
“Whilst we were expecting to see a reduction in business rates, by providing 100% relief for 12 months for eligible businesses in the retail, leisure and hospitality sectors, the Chancellor has gone for a real shock and awe measure. Along with the announcement of up to £3,000 in Local Authority cash grants for around 700,000 businesses currently eligible for small business rates relief, this measure could be a shot in the arm for small independent companies.
“Increasing the Employment Allowance to £4,000 means businesses can employ four full-time employees on the National Living Wage without paying any employer National Insurance contributions. This demonstrates a fantastic measure of support for small and fast-growing companies, encouraging them to hire their first employees.
“A newly announced Coronavirus Business Interruption Loan Scheme could provide an important vehicle to help banks support the businesses that are most challenged by the immediate impact of coronavirus.
“It’s a really interesting development and builds on our existing package of support that we are providing to affected businesses. This includes 12-month capital repayment holidays on existing loans over £25,000 and increased or new overdraft facilities or other working capital solutions. We are also increasing access to funding, with 360,000 SMEs having pre-assessed lending limits which can be accessed via the Barclays app or Online Banking.
"These measures sit alongside the £14 billion lending fund that we launched last year. This is part of a three-year commitment and is very much there to help SMEs build resilience during uncertain times.
“It is great to see the Chancellor talking about what else can help to support small businesses affected by coronavirus in addition to the help banks can offer. His reminder that businesses can ask HMRC for time to pay their tax bills, and the creation of a dedicated Time to Pay helpline by HMRC to help businesses concerned about paying their tax due to coronavirus, is very welcome.
“It’s really important to remember that, as well as financing, the thing that businesses need the most right now is the chance to talk to somebody about their options. Our network of relationship managers across the country is ready to work with businesses to help them through whatever challenges they may be facing.”
Mark Suthern, National Head of Agriculture, Barclays
“From an agricultural perspective, this Budget was better than expected and included welcome measures to support UK farmers.
“Allowing agricultural businesses to continue using red diesel was the most significant decision. This is the main way that farming families and businesses run their agricultural machinery so this was a really vital measure to support the UK’s agricultural firms and ensure they can continue producing high-quality food of British provenance.
“The finalisation of the Shared Rural Network Agreement, which will see the government commit up to £510m to improve mobile coverage, should see 4G rolled out across 95% of the UK land mass by 2025. As more and more farmers embrace new technology, it’s great to see this kind of investment. Of course, there are clear benefits for agri-tech, but there’s a social benefit here as well. Wider 4G access could help people in more hard-to-reach places address loneliness, enable people to connect with each other, and to share best practice in business.
“After a very wet winter, it was great to see measures to combat flooding. The funding announced, including £5.2bn for defences and £120m for repairs, will benefit a number of rural areas – and will likely be of benefit to large areas of agricultural land. We have also announced a £50m fund to help SMEs and rural businesses affected by the recent flooding. This includes access to funding, capital repayment holidays on eligible loans and increased or new overdraft facilities. We’re really keen to ensure that SMEs and farmers are aware of the support that we could provide for them.”
Juliet Rogan, Head of High Growth and Entrepreneurs Coverage, Barclays
“There was clear recognition in this Budget announcement of the role that technology has to play in driving Britain’s economic growth. Funding commitments include £900m to encourage homegrown developments in areas including nuclear fusion, electric vehicles and space exploration. The government’s investment in future-led technologies should help position the UK at the forefront of growth and innovation and ensure it remains one of the best places in the world to start and grow a business.
“From an infrastructure perspective, it was good to see a series of announcements on superfast broadband. One of the challenges we have as a nation is the technological infrastructure of the UK. The government has committed to delivering gigabit-capable broadband across the country – a step that could have a big impact on productivity.
“The government has also pledged £400m to the British Business Bank to support innovative high growth companies to scale. The move will see £200m focused on increasing investment into health and life sciences alongside private sector capital, while a further £200m will be made available to high growth SMEs through venture and growth capital funding partners.
“It’s also great to see the extension of the Start Up Business Loans programme to 2022, which should help even more new, innovative businesses to become firmly established.
“There were rumours ahead of the Budget announcement that Entrepreneurs’ Relief could be scrapped; instead, the lifetime limit has been reduced from £10m to £1m. It’s positive that it hasn’t been scrapped entirely. It is high risk to start your own business and it seems like a sensible move to retain elements of the programme. By retaining but reducing it, the government will still be supporting smaller entrepreneurs who are really important to the economy.”
John Ainsworth, National Head of Real Estate, Barclays
“It’s important we take all available opportunities to help boost housing supply to meet demand – so any measure that helps drive development is to be welcomed. The Budget unveiled a series of funding commitments for housing and infrastructure that could provide a boost for housebuilding.
“The Chancellor said there would be a total of £12.2bn in grant funding for the Affordable Homes Programme (of which £9.5bn is newly announced). This will attract a further £38bn in public and private investment over five years, the government says. There was also £27bn for strategic roads between 2020 and 2025: that should help open up potential sites for development.
“The Chancellor has reiterated the government’s commitment to build at least one million new homes by the end of this parliament. Newly announced funding commitments, such as £400m for combined authorities to develop brownfield sites, should help to ensure any increase in housing delivery is spread equally across the country.
“A 2% stamp duty surcharge for non-UK residents could be seen as a positive or a negative step depending on your perspective. UK investors may see that as an opportunity. What they might not want to happen is for that to depress buyer demand and lead to a fall in values.
“Increasing the structures and buildings allowance, from 2% to 3%, could provide up to an additional £1bn in relief for businesses over the next five years. Encouraging investment in new buildings and renovations can only be a good thing and should help both individual businesses and the wider economy.”
Ian Workman, Co-Head of SME, Barclays
“This was a Budget intended to reinforce the government’s commitment to ‘levelling up’ the regions.
“This can be seen in the investment in infrastructure, which will benefit many areas outside London. To take one example, the development of the A303 is a positive step for the south west. Not all of this investment will be directed by central government; transport settlements will be based on plans put forward by elected mayors. It’s also worth noting the additional funding for Scotland, Wales and Northern Ireland, where the Chancellor pledged £242m to fund four city and growth deals.
"The 100% business rate relief in 2020/21, for properties in the retail, leisure and hospitality sectors in England with a rateable value below £51,000, will also affect a lot of smaller businesses outside London, releasing extra cash when they most need it.
“The announcement of the Coronavirus Business Interruption Loan Scheme will be welcomed by SMEs. If you look at that in combination with the Bank of England’s decision to cut interest rates from 0.75% to 0.25%, it means there is more support available for those businesses that have been worst affected by coronavirus. At Barclays, we’ve introduced additional measures, including capital repayment holidays for business loans over £25,000. Our relationship managers are working hard to reach out to customers to see how we can help.
“Overall, while some of the longer-term spending around infrastructure will take time to have an effect, this was a business-friendly budget. It was very supportive of SMEs and addressed the immediate issues raised by coronavirus."
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