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Chancellor announces business rates cut, coronavirus loan and will fund statutory sick pay for two weeks for hospitality firms following coronavirus outbreak

Chancellor announces business rates cut for hospitality firms following coronavirus outbreak, abolished for small companies:

Hospitality businesses will have their business rates cut this year while small firms will see them abolished altogether following the coronavirus outbreak. Chancellor Rishi Sunak announced the emergency measure in the Budget today (Wednesday, 11 March) in a bid to help businesses during the outbreak. All retail, leisure and hospitality businesses with a rateable value of less than £51,000 will be exempt from paying business rates during the next financial year.

He also extended the 100% discount to all eligible retail and leisure businesses, including nightclubs, small hotels and guesthouses. Sunak said: “There is likely to be a temporary disruption to our economy. On the supply side, up to one-fifth of the working population could be off work at any one time and business supply chains are being disrupted around the globe. This will mean, for a period, our productive capacity will shrink.

There will also be an impact on the demand side of the economy due to a shrink in consumer spending. Our manifesto promised for shops, cinemas, restaurants and music venues with a rateable value of less than £51,000 we would increase their business rates retail discount to 50%. Today, I can go further and take the exceptional step for this coming year of abolishing their business rates altogether. Museums, art galleries, theatres, caravan parks, gyms, small hotels and B&Bs, sports clubs, nightclubs, clubhouses and guest houses wouldn’t benefit from today’s measure – but they could be some of the hardest-hit. So for this year I have decided to extend the 100% retail discount to them as well.

That means any eligible retail, leisure or hospitality business with a rateable value below £51,000 will, over the next financial year, pay no business rates whatsoever. That is a tax cut worth more than £1bn, saving each business up to £25,000. Almost half of all businesses won’t pay business rates for the next 12 months.” Sunak also announced a coronavirus loan scheme would be introduced to cover the cost of salaries and bills. It will offer loans of up to £1.2m to support small and medium-sized businesses. He added: “The government will offer a generous guarantee on those loans, covering up to 80% of losses, with no fees, so banks can lend with confidence.

This will unlock up to £1bn of attractive working capital loans to support small businesses, with more as needed.” Meanwhile, for businesses with fewer than 250 employees, the government will fund statutory sick pay for two weeks where a member of staff has to self-isolate because of coronavirus. As part of the Budget, the chancellor also announced a review into the long-term future of business rates, to be concluded by the autumn. He added the business rate discount for pubs this year would be £5,000 rather than £1,000. A planned rise in beer, cider and wine duty was canceled. Sunak said £1m was also being made available to promote Scottish food and drink overseas, along with £10m of new research and development funding to help distilleries go green.

Source: Propel Newsletter
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