HOPES are high that the Budget will offer a silver lining following many dark months for businesses, reports Nadia Jefferson-Brown.

The pandemic has paralysed much of the economy and Government support has been propping up thousands of businesses, many of which will not be reopening until April 12 at the earliest under Boris Johnson’s lockdown exit plan.

With the furlough scheme, business rates and stamp duty holidays due to end soon, all eyes will be on Chancellor Rishi Sunak next Wednesday, March 3, to see what support he offers.

Carolyn Frank, of North Yorkshire Federation of Small Businesses, said extended emergency support in the Budget was crucial.

“Rebuilding post Covid will need continued investment and small businesses, which are key to recovery, will need supporting with business-friendly taxation to support employment.

“Fifty-six per cent of those on furlough have been in sectors outside of retail, hospitality and leisure. These other sectors and employees will need ongoing support until businesses can re-establish normal trading levels.”

Reducing employer National Insurance contributions and a reintroduced job retention bonus would help, with a phased withdrawal of furlough, she said.

One in five small firms hit by the crisis had missed out on support, said Carolyn, who argued that support should be extended to company directors, some traders, and those new to self employment.

“Business rates reform is critical, and interim relief essential. FSB would like to see the rateable ceiling for small business rates relief move to £25k, and relief extended to supply chains.”

John Lowery, of Cynosure Events whose events such as York Balloon Fiesta have been hit by the pandemic, wants to see the five per cent VAT extended for an extra 12 months. “Otherwise what was the point of it when our event businesses have been closed during the majority of that offer?” he asked.

York micro brewer Andy Herrington, of Ainsty Ales, is relying on the furlough scheme and wants that to continue. “Without pubs and restaurants open it simply isn’t busy enough to have the whole team working until then.” An extension to the business rate holiday would also help as breweries are paying VAT and monthly beer duty to HMRC, he added.

Rebecca Hill, of Galtres Lodge in Low Petergate, York, agreed that an extension to the VAT reduction for hospitality and business rates relief would help significantly.

“This will enable us to re-start trading with higher revenues and lower outgoings, which will help us to get back on our feet and keep all of our team employed.”

She said the furlough scheme had been a ‘lifeline’ to protect jobs but employers had still incurred costs.

“Our small business still pays out over £3,000 per month in PAYE and National Insurance which is not currently covered by the furlough grants. Employees also earn holiday whilst furloughed. This means that our team would have to either take their accrued holiday when we re-open when we will want all hands on deck. To avoid this, we are asking them to take holiday leave now whilst on furlough, but this must be paid at 100 per cent of their normal wage, leaving us as the employer to incur the cost to top up the extra 20 per cent.

“This holiday top-up costs our business roughly a further £1,000 per month, so that’s £4,000 per month in total just to keep our staff employed despite them not being required to work.”

Katie Machin, a chartered financial planner at YorWealth, highlighted current speculation around the capital gains tax (CGT) rules and alignment with income tax rates.

“This would really upend the housing market, which is already experiencing potential uncertainty due to the stamp duty relief coming to an end," she said. "This would possibly reduce supply as people put off selling properties in favour of renting, thereby pushing prices even higher."

She added: “If the Chancellor does plan to re-align the CGT rates and income tax rates, it would be good to see the current CGT exemption amount remain, rather than reduce, as has been muted.

“Additionally, if the new rules were not introduced until the 2021/22 tax year, this would provide sufficient time for those with properties and other ‘gain-heavy’ assets, time to plan their longer term prospects.

“Pensions are an area always under scrutiny, with many changes and restrictions over recent decades. I would like to see no changes to pension legislation in the short term, providing certainty for the time being.

“I think whatever the Chancellor decides, he needs to raise money to repay our debt, which is now larger than the financial crisis of 2008, however, the economy is very fragile at the moment so he needs to be careful.”