BUSINESS BUDGET
l Sunak praised for help in ‘last lap’ of crisis l Corporation tax hike ‘catches breath’
RISHI Sunak has won praise for a Budget that could help Scotland’s small firms get through the “last lap” of the coronavirus crisis.
However, experts warned the Chancellor may have to adapt his plans if the pandemic stymies firms’ plans to reopen and said he could have done more to encourage businesses to create new jobs.
The measures that will provide most benefit for small firms include the extension of the Coronavirus Job Retention Scheme furlough programme, which was due to finish on April 30, until the end of September.
Employers will be expected to contribute towards the costs from July.
The Chancellor moved to help ease the pressure on the cash flows of businesses by launching a programme of Governmentbacked recovery loans, under which firms will be able to borrow from £25,000.
The decision to exempt firms that make profits of £50,000 or less from planned increases in corporation tax may help those that make money to maximise investment.
Mr Sunak also hopes to provide a boost to the growth prospects of small businesses by introducing a programme of training in management skills and digital. The Help-togrow scheme will offer firms a 50 per cent discount on qualifying software.
Support for self-employed people will be extended to September. Following claims that many have been excluded from existing coronavirus schemes, Mr Sunak said he would extend the support available to a further 600,000 people, including many who became self-employed last year.
The Federation of Small Businesses (FSB) in Scotland welcomed most of the announcements but said policymakers needed to take a long-term view to small business recovery.
Andrew Mcrae, FSB Scotland’s policy chair, said the package of measures “gives the bulk of Scotland’s small business community more fuel to get through the last lap of this crisis”.
He noted: “The important move to extend furlough buys local employers important time until the wider economy gets up and running. And additional emergency payments for the self-employed means that those that work for themselves aren’t going to be left high and dry over the summer.”
However, Mr Mcrae added: “These measures could have been complemented with a cut in employers’ national insurance contributions to make it cheaper to create jobs.”
He felt the decision to extend reductions in the VAT rate for firms in the hospitality sector until March next year may not provide them with enough time to recoup lost business.
The 5% rate will be extended for six months to the end of September, with an interim rate of 12.5% applying until next March.
Mark Houston, Glasgow office managing partner at Johnston Carmichael chartered accountants, said the support provided by the Chancellor could help businesses in the hard-pressed leisure and hospitality sector to trade their way out of the downturn.
He thinks the introduction of a 130% super deduction in respect of spending on qualifying assets could encourage firms to
The Chancellor must keep the door open to providing more support if the pandemic hits reopening plans again
invest in growth.
Liz Cameron, director and chief executive, Scottish Chambers of Commerce, said Mr Sunak had provided reassurance, but added: “The Chancellor must keep the door open to providing more support if the pandemic hits our economic reopening plans again.”
She said too many businesses and individuals had still been unable to access any Government support.
Mr Mcrae highlighted uncertainty about whether firms in Scotland will benefit from some important measures of the kind announced by Mr Sunak. These included a £5bn programme of restart grants for firms in England that is designed to help revive high streets and an extension of business rates relief for the retail, hospitality and leisure sectors.
Ms Cameron said the Scottish Government must use the £1.2bn additional funding it will receive to ensure firms in the country do not miss out.