Given the circumstances, the Chancellor had to be bold today, and he came through for business. With the coronavirus outbreak threatening a cashflow crunch, measures to cut costs and support loans to businesses are very welcome. Wider reliefs around business rates and job taxes will also buoy firms as they look to weather COVID-19’s implications.
There is also a business rates holiday for small retail, leisure and hospitality firms.
Mike Cherry, national chairman of the Federation of Small Businesses, said: “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 local communities.”
As predicted, pensions tapered annual allowance thresholds were also increased, and Nigel Peaple, director of policy and research at the Pensions and Lifetime Savings Association, said: “We are pleased the Government has opted for a sensible, no-surprises Budget that can give people confidence to save. Small but vital changes to the rules regarding the annual allowance taper and the net pay anomaly remove complexity and confusion.”
But disappointingly, Entrepreneur’s Relief was reduced from £10 million to £1 million and for some, said Steven Cameron, pensions director at Aegon, “this will come as a harsh blow if planning to use the sale of their business to fund their retirement.”
While too late for those about to retire, for those at younger ages, the message is not to risk all your retirement plans in a vehicle which could suddenly lose its tax advantages.
“While the reliefs and allowances for pensions are reviewed from time to time, the main purpose of pensions is to provide retirement incomes and it would be very surprising to see any retrospective cuts in tax reliefs there,” said Afford Bond Tax Director Chris Regnauld.