The 2020 UK budget will allow SMEs to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.
This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19. Employers with fewer than 250 employees will be eligible.
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The government will also increase the business rates retail discount to 100% for one year. This will be expanded to the leisure and hospitality sectors.
A new temporary Coronavirus Business Interruption Loan Scheme will be delivered by the British Business Bank. This will launch in a matter of weeks to support businesses to access bank lending and overdrafts.
The government will provide lenders with a guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee. The Scheme will support loans of up to £1.2m in value. This new guarantee will initially support up to £1bn of lending on top of current support offered through the British Business Bank.
The help for SMEs form part of a £12bn package to mitigate the economic disruption caused by COVID-19. The budget also announces the launch of a fundamental review of business rates, due to report in the autumn.
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By GlobalDataIn addition, the government is launching a Reforming Regulation Initiative to collect ideas for regulatory reform.
The 2020 UK budget and fintech
The government will support the UK’s fintech sector, along with the wider digital economy. The Budget announces a review of the UK fintech sector led by Ron Kalifa to support growth and competitiveness in the sector. In particular, the review will identify what more industry and government can do to support growth and competitiveness. The government will also extend funding for the Fintech Delivery Panel, as well as touring the regions and nations of the UK to showcase its diverse range of fintech firms.
A Revolut spokesperson said: “The UK’s fastest growing technology company welcomes the Government’s announcement of a major review of the fintech sector to ensure that the UK remains the world leader, driving innovation and creating jobs.
“We look forward to contributing to the review and sharing some of the insight we have learned in developing innovative new services for our customers.”
The 2020 UK budget and RBS-disposal delayed
The government reiterates its intention to dispose of its Royal Bank of Scotland shareholding. But this commitment remains subject to market conditions and achieving value for money for taxpayers. The government expects the programme of sales to be completed by 2024-25. This is up to one year later than the government had targeted.
Other budget measures relating to banking flag up changes to the Credit Unions Act. The government recognises that credit unions can play a vital role in financial inclusion. And so it will bring forward legislation to allow credit unions to offer a wider range of products and services to their members.
On access to cash, the budget is light on details. The government says that it will bring forward legislation to protect access to cash and ensure that the UK’s cash infrastructure is sustainable in the long-term.
