Budget 2020 for small businesses: entrepreneurs’ relief reduced but not scrapped
The chancellor was widely expected to announce the abolition of entrepreneurs’ relief in today’s budget. However, rather than removing entrepreneurs’ relief altogether, he has announced that the lifetime allowance is being reduced from £10m to £1m with immediate effect. Whilst this cut is significant, it is good that the principles of entrepreneurs’ have been upheld for entrepreneurs and EMI option holders alike.
Measures benefiting small businesses announced today include:
- A review of the EMI scheme. This could indicate a widening of its scope, making it more attractive to both new and existing businesses. We will be monitoring developments closely
- An increase in the Employment Allowance from £3,000 to £4,000. The government estimates this measure will benefit around 510,000 businesses, including around 65,000 businesses which will be taken out of paying NICs entirely
- Refunding businesses with fewer than 250 employees the cost of providing statutory sick pay to those off work due to coronavirus. This will be limited to two weeks’ SSP per employee
- Abolition of business rates (for this year only) for retail, hospitality and leisure businesses in with a rateable value below £51,000 a year
- A £5,000 business rates discount for pubs in England with a rateable value below £100,000, again for this year only
- A fundamental review of business rates which will report in the autumn
- An increase in the R&D budget
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