The latest budget has just been announced – we’ve pulled out the most relevant changes to your business and detailed them below

Chancellor of the Exchequer, Rishi Sunak has pledged to do “whatever it takes” to protect the UK economy from the coronavirus; emphasising that whilst “for a period, it is going to be tough…it will be temporary.”

Business Rates

• Business rates will be abolished for small businesses in the retail, leisure and hospitality industries with a Rateable Value of up to £51,000 until the end of 2020

This will be a potential saving of up to £25,000 per year for independent restaurants, cafés & food businesses.

• Pubs with a Rateable Value get a business rate discount of £5,000

This is up from £1,000 therefore saving them £4,000

• A £3,000 cash grant for businesses eligible for small business rates relief

Small business rates relief is available for those with a rateable value below £15k

Sick Pay

• Employees who self-isolate will now be entitled to Statutory Sick Pay (SSP) from day one

Previously employees were only entitled to SSP after 3 days of being sick. SSP is paid to employees at £94.25 per week

• The government will now refund SSP paid by small businesses to employees up to a maximum of 14 days.

Previously all SSP was paid by businesses without any payment from Government. This change means that businesses can claim back £118.50 per employee

• Self Employed people who self-isolate will now be entitled to claim Employment Support Allowance (ESA) from day 1 instead of day 5

ESA is £57.90 a week if you’re aged under 25 and up to £73.10 if you’re aged 25 or over. You need to have paid 2 years NI contributions to be eligible.

Personal Tax

• The National Insurance threshold will be raised from £8,632 to £9,500 per year from April 5th

Those earning more than £9,500 will be, on average, £85 a year better off

Duty

• Fuel duty has been frozen.

• The tax on Red Diesel has remained at 11.1p per litre, compared with 57.7p for standard diesel

This will increase for most businesses in 2 years time

• Beer, wine and cider duty rise will be cancelled.

Plastics

• A new plastic packaging tax from April 2022 will charge manufacturers and importers £200 per tonne on packaging made of less than 30 percent recycled plastic.

This could see the price of plastic packaging rise from April 2022

Other Business Support

• A “Coronavirus Business Interruption Loan Scheme” will support up to a further £1bn lending to small businesses. The government will guarantee bank loans on amounts up to £1.2m. The government will cover bank losses up to 80%.

This is a new initiative and details are still unclear as to who this is for.

• Scaling up of HMRC’s ‘Time to Pay’ service. Including a new helpline so businesses and the self employed can arrange to defer tax payments.

We are awaiting further clarification on this.

Opinion

We welcome some of the changes made in the budget as they will directly help many independent catering businesses at this turbulent time in particular:

  • The changes to Business rates is a real boost to small businesses with premises saving up to £25,000.
  • Paying SSP for 14 days and allowing claims for ESA from day 1
  • The increase in the National Insurance threshold to £9,500
  • The freeze in fuel duty

We also welcome the principle of a ‘Business Interruption Loan Scheme’ and the ‘Time to Pay’ service however we are seeking further clarification as to who is eligible and how this can be accessed.

We are however concerned about the lack of further support for many caterers, in particular the mobile & events sector, many of whom do not have a premises and therefore do not benefit from the changes to business rates. Aside from the changes to Sick pay and National Insurance there was very little to reassure caterers.

These are very important pillars of the economy facing a very turbulent season and to not provide tangible support in uncertain times is not acceptable. We want to reassure members that we are working tirelessly behind the scenes. We are in continual dialogue with government departments and industry bodies including those in the event industry such as the AFO, EIF, NOEA, AIF and ASAO to find solutions to the challenges posed by Covid-19 for our sector.

We will continue to provide further updates to members as and when we have them.

NCASS Member?

To discuss any of the above points or if you have any questions, please contact your NCASS Account Manager on 0300 124 6866 Monday -Thursday 9-5:30pm and Friday 9am – 5pm.