Chancellor tipped to offer tax holidays to firms hit by virus
Rishi Sunak: Budget measures
Chancellor Rishi Sunak is considering tax holidays and other forms of tax support for businesses hit by the effects of the coronavirus.
It may mean giving firms the opportunity to delay payments of VAT, national insurance and other levies to help overcome any cash flow problems.
Some companies fear the virus will hold up supplies or prevent goods getting to market.
Tax reliefs were used in 2001 to help farms and others affected by the foot-and-mouth outbreak and were among the measures suggested last week by Daily Business to ease the latest pressures on businesses.
There is also likely to be statutory sick pay rebate for smaller companies on top of changes allowing statutory sick pay (SSP) to be claimed from the first day of absence.
Support seen in 2009 in the face of the global financial crisis included improvements in the tax provisions for accelerated depreciation, loss carry forward and carry back, R&D tax credit, indirect tax changes (VAT reductions) and personal income tax measures.
Regarding the climate challenge, a big question will be whether this will be the time for the Chancellor to stop the freeze in fuel duty. The freeze in 2019-20, announced in the 2018 Budget, cost the Exchequer £840m in that year.
He may announce some incentives that address the added costs – greater capital allowances, greater reliefs for environmental expenditure, and additional spending, says Chris Sanger, EY partner and head of tax policy.
The National Institute for Economic and Social Research has predicted the coronavirus outbreak could knock 0.5% off economic growth this year.