The threshold for paying National Insurance will be raised to £9,500
The Employment Allowance will be increased from £3,000 to £4,000
The Spring Budget 2020 included a raft of announcements for businesses, many positive including Coronavirus support, business rates relief and investment in transport infrastructure. Find out what the Spring Budget 2020 means for your business.
Many businesses will welcome the news that the Chancellor and the Bank of England will introduce a number of contingency measures to shore up the economy in light of the Coronavirus crisis in order to mitigate any potential short term disruption.
It was particularly pleasing to see the announcement from the Bank of England that additional finance will be made available for the purpose of lending to SME’s. However, it is important that the government and the Bank of England work with financial lenders to ensure that the money being made available filters down to small businesses during this difficult period as they are particularly susceptible to loss of trade and sickness in the workforce.
This support must also be made available immediately as businesses are already facing disruption.
The Government has also reiterated the pledge made in the Queen’s Speech to carry out a fundamental review of the business rates system and implement a discount for small retailers to reduce the burden that SMEs are currently facing. While it is good to see the Government easing the business rate burden for SMEs based on the high street, this approach does little to help the larger institutions which receive no government support, yet are responsible for paying the bulk of the overall rates bill.
The government’s intention to reduce the revaluation period from 5 years to 3 years in 2021 does not go far enough with the transitional relief system a major source of discontent, which disproportionately affect retailers and prevents firms from investing in the business and their staff.
The system is fundamentally unfair and requires large scale reforms including restructuring the appeal system to reduce bureaucracy, remodelling the relief system to increase accessibility and removing plant and machinery from the rating system.
Employment & Skills
An adequately funded further education system, and investment in adult skills are both crucial for ensuring that residents across the UK – particularly in areas such as Birmingham, with relatively high levels of low- and no- skilled residents - can develop the skills necessary to access meaningful employment opportunities and to drive business growth.
However, while funding for further education estates and the announced funding for T level provision will be very much welcomed by the sector, consideration must also be given to challenges such as the impact of unfunded increases in college pensions and resourcing for English as well as maths provision for those without requisite GCSE grades.
Transport and Infrastructure
Following on from the recent announcement that the government will proceed with HS2 in its entirety, it was especially pleasing to see the government commit funding to the Midlands Rail Hub which will boost connectivity from East-West across the Midlands Rail network. This increased investment will lead to greater connectivity between the major cities in the Midlands and provide a much-needed boost to productivity levels.
The funding announced today for the Birmingham 2022 Commonwealth Games was also welcomed by the Chamber as it will allow the region to capitalise on this opportunity and turn 11 days of sport into a lasting trade, investment and economic legacy.
It was also pleasing to see the Chancellor’s announcement that employers will no longer pay National Insurance Contributions for ex-forces personnel for the first year of work. As signatories of the Armed Forces Covenant, the Greater Birmingham Chambers of Commerce welcomes the support shown for our armed forces and veterans in helping them find employment.