“We will get through this together” says Chancellor

Chancellor Rishi Sunak

Chancellor Rishi Sunak launched his budget by warning of a significant disruption to the UK economy caused by the coronavirus outbreak, but promised that its effects would be temporary and the country “will get through this together”.

He pledged more money to battle the Covid19 crisis and extra investment in infrastructure, business support including more support for regional Growth Hubs, business tax relief, a significant boost in R&D spending, saving but reducing entrepreneur’s relief and freezing duty on booze and fuel.

For list of key budget pledges, scroll down to the bottom of this story.

Dame Carolyn Fairbairn, the Director General of the CBI, praised the chancellor’s first budget. “In deeply challenging times the Chancellor has worked against the clock to deliver two Budgets in one: a first for national resilience today and a second for economic ambition tomorrow. It’s a bold Budget at scale, coordinated with the Bank of England, which will help people and business through tough times.”

National Chairman of the Federation of Small Businesses (FSB), Mike Cherry, added: “This is a pro-small business Budget, which has delivered a high streets bonus, a series of Conservative manifesto promises to small businesses, and emergency steps to support small firms through the coronavirus outbreak.”

Dame Carolyn added: “While the response to Covid19 is urgent, it is very good to see this Budget’s focus on innovation and infrastructure. The Chancellor has listened to many calls from CBI members, with decisive action on vital long-term issues.

“The significant uplift in R&D funding, creation of a UK version of ARPA, a fundamental review of business rates and spending promises on infrastructure will all bring real benefits to people, business and communities.

Ian Mean, Gloucestershire Director of Business West, added: “What I liked about the package – and I  am certainly not an economist – was that it seemed to be very much joined up – starting with an announcement early morning before he stood up in the Commons that interest rates would be cut to virtually zero – from 0.75% to 0.25%.”

Hayley Simmons, head of insolvency at Shaw Gibbs, Oxford-based accountants and business advisers, added:“It’s a welcome relief that the Chancellor did not abolish the Entrepreneur Relief all together. However the changes announced today, which have already taken effect from midnight last night, will have a detrimental impact on those who were unable to take advantage of the reliefs in time. They will suffer monetary losses as a result. Our advice to those now contemplating retirement or a sale of either, all or part, of their business is to seek advice to further explore other options.”

Dame Carolyn of the CBI also highlighted the chancellor’s powerful incentives to get businesses investing, increasing the R&D tax credit and the Structures and Buildings Allowance. “The £5bn of new export loans will encourage the best of UK business to look to new global markets,”  she said.

“Overall, today’s Budget is a powerful signal to firms at home and abroad that the UK can and will manage the immediate challenges and long-term opportunities in parallel.”

The FSB added that covering the cost of Statutory Sick Pay and emergency measures for the self-employed are particularly welcome.

Federation of Small Businesses (FSB), Mike Cherry, added: “Suspending business rates for small high street firms is a huge bonus for our town centres and high streets. Together with extra cash for those that already qualify for small business relief, this shows a real commitment to supporting small businesses at the heart of communities. The case for fundamental reform to bring down the burden of such a regressive tax on bricks-and-mortar businesses is now stronger than it has ever been, and FSB is ready to help the Government deliver this.

“One of FSB’s main asks at this Budget was a cut to the Jobs Tax, an easing of the cost of employer National Insurance, and we are very pleased to see such a pro-growth, pro-employment measure delivered for all small employers. A National Insurance holiday for small firms employing military service leavers will incentivise tapping the skills and potential of those joining the workforce after a career in the armed forces.

“The continued freeze on fuel duty for another year is a sensible measure which will help those small businesses which are reliant on vehicles. While a move to greener modes of transport is an important longer-term goal, now was not the time to hike tax on hard-working entrepreneurs who have no choice but to drive for their business to function.

“The sensible compromise on Entrepreneurs’ Relief is one that we have proposed and championed, and everyday entrepreneurs will be pleased to hear the Chancellor say that he has listened to FSB on this.

“This has been a deliberately pro small business first budget for the Chancellor. We hope it is the start of things to come.”

Richard Rose, Head of BDO LLP in the Midlands, said: “Today’s Budget made an encouraging start towards the Government promise of ‘levelling up’. Significant pledges were made around infrastructure investment, enhanced devolution and investment in education across the regions.

“For entrepreneurs, the decision to lower the threshold for entrepreneur’s relief rather than abolish it is a welcome message for the 80% of business owners who will remain unaffected by the change. Alongside this came the commitment to continue to invest in ideas by encouraging R&D and green growth.”

Key budget business highlights

In response to the Coronavirus emergency:

  • Statutory Sick Pay will be paid from day one, rather than day four. Statutory sick pay will also be available for all those who are advised to self-isolate – even if they haven’t yet presented with symptoms, and can obtain a sick note by contacting 111.
  • For businesses with fewer than 250 employees the cost of providing Statutory Sick Pay to any employee off work due to coronavirus will, for up to 14 days, be refunded by the Government in full.
  • HMRC will scale up the Time To Pay service, allowing businesses and the self-employed to defer tax payments over an agreed period of time.
  • A new, temporary Coronavirus Business Interruption Loan Scheme will allow banks to offer loans of up to £1.2m to support small and medium sized businesses. The government will guarantee those loans, covering up to 80% of losses, with no fees.
  • For the coming year business rates for shops, cinemas, restaurants, and music venues with a rateable value of less than £51,000 will be abolished altogether. This now extends to Museums, art galleries, theatres, caravan parks, gyms, small hotels and B&Bs; sports clubs, night clubs; club houses and guest houses. Worcester-based commercial property agency Bromwhich Hardy partner, Tom Bromwich, said:”Chancellor Rishi Sunak’s pledge to ensure nearly half of all business properties in England will not pay a penny of business rates over the next 12 months was a welcome shot in the arm. The Chancellor’s move to exempt small retail, leisure and hospitality businesses from paying business rates for one year to protect the economy from the impact of the coronavirus outbreak is a significant and welcome step,” he said. “We also welcome the announcement of a new review into the long-term future of business rates themselves, which should be completed by the Autumn.”


  • Corporation Tax rate to remain at 19% – still the lowest rate in the G20.

Further budget announcements

  • National Insurance threshold increased from £8,632 to £9,500.Ian Miles, Private Client Tax Partner at accountants: James Cowper Kreston, said: “tax changes mean that individuals may have more to spend too. The rise in the threshold for National Insurance Contributions is set to increase from £8,632 to £9,500 which will provide a saving of just over £100 per annum for all workers and the self-employed. There was also some hidden good news for high earners. Dressed up as relief for NHS doctors, people earning between £110,000 and £200,000 who may have previously had to pay the pension tax charge will no longer have to. There is some withdrawal of tax relief on pension contributions for taxpayers earning in excess of £300,000 but the Chancellor has not abolished higher rate tax relief on pensions more generally as was muted a few weeks ago.”
  • £10m of new R&D funding to help distilleries go green. This year’s planned increase in spirits duty will be cancelled.
  • For this year only the business rates discount for pubs will be £5,000, not £1,000. A planned rise in beer duty will also be cancelled and duties frozen for cider and wine.
  • Fuel duty will remain frozen.

Businesses seeking support to start up, grow and export.

  • £130m of new funding to extend Start-up Loans
  • £200m for the British Business Bank to invest in scale-ups
  • Another £200m for life sciences
  • More money for Growth Hubs
  • £5bn of new export loans for businesses

Entrepreneurs’ relief

  • Lifetime limit reduced from £10m to £1m.


  • The Research and Development Expenditure credit will be increased from 12 to 13%
  • The Structures and Buildings Allowance will be increased from 2 to 3%
  • Investment in R&D increased to £22bn a year. As a percentage of GDP, it will be the highest in nearly forty years – higher than the US, China, France and Japan. And a major step towards the government’s target of increasing public and private investment in R&D to 2.4% of GDP.
  • £1.4 bn investment into in the UK’s world-leading science institute at Weybridge, where they’re working to analyse samples of Coronavirus.
  • Investment of more than £900m in nuclear fusion, space and electric vehicles.
  • Investment of at least £800m into a new blues-skies funding agency here in the UK, modelled on the extraordinary ‘ARPA’ in the US.
  • Investment of £400m incremental funding into high quality research, with much of that funding going to brilliant universities around the country.

Other announcements

  • Freezing the levy on electricity and raising it on gas. Supporting the most energy-intensive industries to transition to Net Zero by extending the Climate Change Agreements scheme for a further two years.
  • Introduction of a new Plastics Packaging Tax. From April 2022, the government will charge manufacturers and importers £200 / tonne on packaging made of less than 30% recycled plastic. That will increase the use of recycled plastic in packaging by 40%. James Woollard, CEO at Witney-based Polythene UK, said: “This news is brilliant. We have been waiting for this for three years.” Read our interview with James in the March issue of Business & Innovation Magazine.
  • Red diesel. The Red Diesel scheme allows selected users to pay duty of just over 11p per litre for diesel, compared to almost 58p per litre for everyone else. This tax relief is to be abolished but this change will not take effect for two years – giving businesses time to prepare. But agriculture will retain the relief as will the relief for rail and domestic heating. Responding to this, NFU President Minette Batters said: “The most significant decision today for British farmers is the announcement to retain the relief on red diesel. This is absolutely crucial and we are pleased to see the Chancellor has acknowledged our concerns. Red diesel is the primary fuel to run the majority of agricultural machinery and it is incredibly important for the farm businesses that produce the nation’s high quality and affordable food.”
  • To help develop cleaner alternatives to red diesel and other fossil fuels, the government will more than double R&D investment in the energy innovation programme to £1bn.
  • Investments in flood defences to be doubled over the next six years to £5.2bn.
  • Investment of at least £800m to establish two or more new Carbon Capture and Storage clusters by 2030.
  • £242m of funding for new City and Growth Deals, taking the investment in these deals to more than £2.7bn.
  • £5bn to get gigabit-capable broadband into the hardest to reach places and £510m of new investment into the shared rural mobile phone network.
  • Funding for a new station at Cambridge South and the Midlands Rail Hub
  • More than £27 billion of investment in strategic roads and motorway, a new £2.5bn pothole fund.


  • £1.5bn of new capital over five years to improve the condition of the FE college estate.


  • Extending the Affordable Homes Programme with a new, multi-year settlement of £12 billion.
  • Following the Grenfell disaster, a new Building Safety Fund worth £1 billion.