With the impact of Brexit and Coronavirus, the hospitality industry is one of the significantly affected industries. The impact increases for small businesses with tight resources to operate and limited backup funds for survival during financially stressful times.
However, the budget 2020 has some positive announcements for the hospitality sector which can significantly help small businesses to make it through this tough period. In the sectors of hospitality businesses that are not significantly affected, these reliefs can provide a boost for business growth or opportunities to improve profit margins and cash flow.
The reliefs relevant to the hospitality industry include:
- For businesses with less than 250 employees, the cost of statutory sick pay (SSP) for up to 14 days will be refunded by the government in full
- From 6th April 2020, Employer National Insurance Contribution (NIC) Allowance increases from £3,000 to £4,000. However, employers with a NIC bill of £100,000 or more in the previous tax year will not be entitled to claim
- From 6th April 2020, tax-free medical treatment extends to include related medical treatment, such as cognitive behavioural therapy, when provided to an employee as part of an employer’s welfare counseling services
- From 1st April 2020, business rates discount increases from £1,000 to £5,000 for pubs in England with a rateable property value below £100,000 for one year
- Small businesses that qualify for Small Business Rate Relief could be entitled to receive £3,000 through a cash grant
- For the tax year 2020-21, eligible businesses in the retail, leisure and hospitality sectors with a rateable property value below £51,000 will get a 100% discount towards business rates
- From 11th March 2020, with retrospective effect, the Structure & Building allowance on new non-residential buildings has increased from 2% to 3%
- From 1st April 2020, the rate of Research & Development Expenditure Credit increases from 12% to 13%. The implementation of the PAYE cap on the payable tax credit in the SME R&D scheme has been postponed until 1 April 2021
- The government will launch a new, temporary Coronavirus Business Interruption Loan Scheme, to support businesses to access bank lending and overdrafts with 80% guarantee on each loan offered by the government to lenders
- Bespoke payment arrangements for financially distressed businesses and individuals due to COVID-19.