Following the budget on 11 March, Bob Trunchion, tax partner at MHA MacIntyre Hudson, says the Coronavirus relief measures were impressive but the Chancellor seems to have forgotten about medium sized businesses and the implications of IR35
“The Chancellor unveiled a formidable package of reliefs for businesses but most only applied to small companies. A company needs to have fewer than 250 employees, in the case of the sick pay refund, or rateable values of less than £51,000 to benefit from small business rate relief.
“It’s true that smaller businesses are more vulnerable but even some larger companies could experience substantial cashflow problems if the virus starts to bite. In addition, from 6 April the changes to IR35 come into force, another major challenge for medium sized companies in sectors like IT and construction.
“IR35 has added a sting that impacts whether some businesses will qualify for Coronavirus relief measures. The new rules mean that many medium sized companies have pre-emptively taken on previously contracted workers as employees, swelling the numbers on their payroll. Some will now be too big for reliefs like the sick pay refund, but would have been eligible had IR35 been delayed. These companies will miss out on any meaningful support but still have all the cashflow risks the virus could prompt.
“The Chancellor may have missed an opportunity to help these businesses by restricting access to the Coronavirus Business Interruption Loan Scheme, medium sized companies should also have been included. Delaying the IR35 reforms would also have been welcome. The bright spot is the upgrade to Time to Pay which does benefit everyone.”
Go to the MHA MacIntyre Hudson website by clicking here: www.macintyrehudson.co.uk