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Calls for government to set out budgetary plans and provide businesses with certainty

Published:  24 November, 2020

The lack of certainty on key budgetary announcements is creating untenable instability for businesses, leading tax and advisory firm Blick Rothenberg has said, adding calls for the government to announce full budgetary plans sooner rather than later. 

Andy Sanford, a partner at the firm, drew attention to former chancellor, Phillip Hammond’s decision to transfer the budget from March to November to allow businesses and government to enact budget legislation before the start of the financial year.

Tomorrow (November 25), a spending review is due to take place in parliament. Sanford argues however, that this does not go far enough.  

“Whilst it is understandable that matters are in flux, the lack of certainty on key budgetary announcements is of acute concern, and undermines the original reason for changing the budget date,” Sanford said. 

“Businesses in the hospitality sector want assurance that valuable business rates exemptions will continue as long as their businesses are affected by the pandemic. On current occupancy and customer levels, particularly in large city centres, they are simply unable to afford full scale rates. With cash reserves dwindling, many are having to decide whether they can afford to continue in business.

“The absence of any clarification on business rates relief is therefore highly concerning.”

The next UK budget was expected to take place in the autumn of 2020. However, a resurgence of Covid cases derailed current chancellor Rishi Sunak’s plans.

In order to “prioritise the response to Covid-19, and our focus on supporting jobs”, the focus switched to a one-year spending review, which would set departmentmental resource and capital budgets for 2021-22.

“While the government would have liked to outline plans for the rest of this parliament, the right thing today is to focus entirely on the response to Covid-19 and supporting jobs – that’s what the public would expect,” the government has said.

Blick Rothenberg also noted the acute impact of the virus on the hospitality sector in particular, which will continue to suffer as the nation migrates out of lockdown to a stricter-than-before tier system

The new tier level for each area will be announced on Thursday 26 November. More areas are expected to be put into higher tiers than before England went into national lockdown. A postcode checker will be available to show which restrictions apply in which area.

Sandford said: “Many good businesses are highly illiquid due to sustained periods of lockdown and reduced economic activity. A renewed focus on business investment reliefs is required to put more cash into the business economy. The delay in announcing any such measures prevents businesses from developing plans to access such funding.

“Businesses need time to plan, and the continued delay in implementing required legislation will affect the impact of such measures.”