Budget to help SMEs deal with Coronavirus.

11th March 2020.

James Salmon, Operations Director.

The UK is at the center of focus today as Bank of England announced an emergency rate cut, and then was followed by massive fiscal coronavirus relief package from the government in the Budget.

Many of the measures aimed to tackle the impact of coronavirus benefit small businesses and so protect some jobs.

Chancellor Rishi Sunak unveiled a £30bn package to combat the coronavirus.

He announced he  is suspending business rates for many firms in England, extending sick pay and boosting NHS funding.

He warned of a significant but temporary disruption to the UK economy but vowed: “We will get through this together.”

Sunak offers lifeline to businesses affected by virus

The Chancellor announced a series of measures to help businesses cope with the fallout from the coronavirus outbreak.

These include a loan guarantee scheme for banks lending to small businesses on amounts of up to £1.2m; a £3,000 cash grant for small businesses that pay no business rates; companies in the leisure and hospitality industries with a rateable value of up to £51,000 will have their business rates scrapped for this year.

Rishi Sunak said that nearly half of all business properties in England and Wales would “not pay a penny of business rates” over the next year and promised a “fundamental review” of business rates will be completed by the next budget in the autumn.

The freeze on fuel duty will be maintained.

However, tax relief on “red diesel” used in construction is to be abolished.

A further £1bn tax cut was handed to small businesses via a boost to the employment allowance from £3,000 to £ 4,000.

The Federation of Small Businesses said the Budget showed a “real commitment to supporting small businesses.”

Measures to mitigate the effect of the coronavirus outbreak include:

Statutory sick pay for “all those who are advised to self-isolate” even if they have not displayed symptoms.

UK employees have already started to get statutory sick pay from the first day off work, to help contain coronavirus.

Business rates for shops, cinemas, restaurants and music venues in England with a rateable value below £51,000 suspended for a year.

A £500m “hardship fund” to be given to local authorities in England to help vulnerable people in their areas.

A “temporary coronavirus business interruption loan scheme” for banks to offer loans of up to £1.2m to support small and medium-sized businesses.

The government will meet costs for businesses with fewer than 250 employees of providing statutory sick pay to those off work “due to coronavirus” for two weeks .

Plans to make it quicker and easier to get benefits for those on zero hours contracts.

Benefit claimants who have been advised to stay at home will not have to physically attend job centres.

A £5bn emergency response fund to support the NHS and other public services.

Those who are not eligible for sick pay, particularly the self-employed, will be able to claim Employment and Support Allowance (ESA) from day one of “illness” rather than day eight.  It is worth £73.10 a week, or £57.90 for the under-25s. The complexity of this benefit may mean this change is unlikely to affect a lot of people.

Global coronavirus cases break 120k level to 121,355, with 4,380 deaths.  The UK saw its biggest daily rise as cases reach 456.

Budget 2020 overview

After just four weeks in the job Rishi Sunak delivered his first Budget yesterday against the backdrop of a worsening coronavirus outbreak, weak economic growth and negotiations on a new trade deal with the EU and the US.

The Chancellor announced a £30bn package to boost the economy, £12bn of which will be specifically targeted at measures to tackle the coronavirus, including at least £5bn for the NHS in England and £7bn for businesses and workers.

These emergency funds will be accounted for in the Autumn Budget.

Aside from measures to tackle Covid-19, Mr Sunak revealed a £600bn infrastructure spending plan for the next five years; said the National Insurance threshold will rise from £8,632 to £9,500, corporation tax will remain at 19% and that fuel, beer, wine and spirit duties will all be frozen.

R&D investment will be increased to £22bn a year and new Treasury offices will be established in the regions.

However many SMEs will be unhappy that there was no relief on IR35 and a the 90% reduction in Entrepreneurs relief (see below).

The increases in day-to-day spending and public sector investment mark an end to a decade of austerity but the Chancellor stated that his Budget would be “delivered within the fiscal rules of the manifesto but with room to spare”.

The CBI, the FSB and Make UK were among the organisations welcoming the Budget.

Entrepreneurs’ relief cut to £1m

The lifetime limit for entrepreneurs’ tax relief will be cut to £1m from £10m, the Chancellor Rishi Sunak said in the budget.

He described the relief as “ineffective” and “unfair”, however, 80% of business owners will be unaffected.

The relief allows business people to pay a 10% rate of capital gains tax when they sell qualifying assets, compared with the usual 20%.

Nimesh Shah at Blick Rothenberg said the move was “disappointing” considering the huge uncertainty facing UK businesses while Philip Salter, founder of the Entrepreneurs Network, said cutting the limit would reduce the incentive for overseas investment.

But Mike Cherry, chairman of the Federation of Small Businesses, said the change protected “the thousands of everyday entrepreneurs who make use of this incentive to help fund their retirement every year”.

R&D tax relief increases

Tax relief for companies that carry out qualifying research and development (R&D) increased in the Budget with the rate of expenditure credit rising from 12% to 13%. SMEs will also be allowed to deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction.

Rise in NICs threshold removes half a million from the tax

In the Budget yesterday the Chancellor announced that the National Insurance contributions threshold will be lifted to £9,500 from £8,632, meaning 500,000 people will no longer have to pay this tax.

Rishi Sunak said: “That is a tax cut for 31m people, saving a typical employee more than £100.”

Iain McCluskey, tax partner at PwC, said: “Prioritising raising the lower earnings limit over the tax-free personal allowance will have a greater benefit to lower-paid workers and is a welcome policy shift.”

However, according to the institute for Fiscal Studies, just 8% of the gains will go to the poorest 20% of working households.

The amount earned before paying 20% income tax will be frozen at £12,500 while the £50,000 threshold at which people start to pay the higher 40% rate of income tax will also remain unchanged.

Additionally, the Chancellor said ministers would publish a new remit for the independent Low Pay Commission to have a formal target of the National Living Wage reaching two-thirds of median earnings by 2024 “as long as economic conditions allow” – a rate of more than £10.50 an hour.

Virus-hit businesses can delay tax payments

Using the “Time to Pay” system, businesses and self-employed people struggling to pay tax bills because of coronavirus hitting their revenue will be able to delay payments until they can afford it, the Chancellor Rishi Sunak announced in the budget.

HMRC will also waive late payment penalties and interest and has recruited an extra 2,000 staff to handle calls to a dedicated Covid-19 helpline.

Homebuyers left disappointed as a Budget stamp duty cut fails to arrive

Home buyers have been left disappointed by the new Budget after the Chancellor decided against a stamp duty cut.

There had been speculation that Rishi Sunak could tweak the tax to help stimulate the housing market, but the budget did not include any relief for UK buyers.

Instead a 2% surcharge was announced for foreign buyers. But with the hike not due to arrive until April 2021, the Treasury expects a spike in purchases which could lead to a mini-London boom.

Jamie Morrison, head of private clients at HW Fisher, said he didn’t expect the rise to have much of an impact on the housing market. “There are still overriding macroeconomic factors that make the UK an attractive place to invest,” he said.

According to the Budget document, property transaction taxes – including Stamp Duty – will bring in £12.8bn in the 2019/20 tax year. This will rise to £18.7bn by 2024/25

Do you sell on credit?

With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option  to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply on credit, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

You might be hesitant about contacting a debt collection agency. What are they going to be like?

Can they help your particular type of business?

There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.

Debt collection agencies are not all alike.

Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and  has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!

At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.

The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.

We are polite, firm and efficient when it comes to recovering outstanding debt.

“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has  helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire

“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections


Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cash-flow.

Don’t let your bankers control you, contact CPA today.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit.  You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping business owners  who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections