Good budget from a guy who has only been in the job for a month, hopefully it will help mitigate some of the bad effects in the UK. Unlike the ECB who are still sitting on their hands whilst economic life in Europe collapses.
Not sure if it is enough for businesses.
I would have liked to have seen....
No VAT needing to be paid for the next 3 months from businesses, giving much needed increased margins in a difficult period.
No PAYE or NIC from the employer for the next 3 months for anyone on basic rate.
The government have given £1bn to a loan fund and said they will guarantee 80% of loans for SMEs so banks have virtually no risk.
However, we are talking banks here, many of whom want many SMEs to go under to get them off their asset books, these loans should have been direct through the government with them making the decision, not giving that to the bank.
Reduction from .75% to .025% is all very well, but have you seen the rates businesses are borrowing at?
I have my personal mortgage at 0.75%, it is costing me £133 in interest a month for £215000.
I have almost exactly the same amount with the business 'loan' (mortgage) at 4.9%, which is £877 a month, a 0.5% drop will see that drop to £788.
The repayments, including capital will drop from £1690 to £1600.
£25 a week! Nearly. Whoopee doo!
The reduction in rates is a bit better.
We have a rateable value of £25k roughly, we pay £8400 a year. That is now zero for 12 months.
So £160 a week saving.
But still, doesn't even come close to making a dent.
Delayed HMRC payments?
Didn't really say what they are offering.
It really needs to be pushed back until all this is over and then the debt spread over 60 months or so interest free, otherwise all you are doing is putting pressure on businesses when they get back on their feet.
We have spent the day working out how we can get through this if business doesn't pick up.
We can't.
That is the crux of it.
I work in seasons. My SS season is March through to August.
I have £9600 in mortgage payments, £4200 in rates, £3600 electricity, £1080 bins, £600 for phone/fibre etc., £720 for epos and card machine, £600 worth of bags, £24000 in wages (not including us taking anything), £118,000 paying suppliers and roughly £22000 will be owed in VAT.
So £185,000 worth of outgoings.
We need to do around £7000 a week to cover that, and that is with me and my wife taking no wages. We usually do around £8000-9000 a week.
So, as you can see, with takings down to around £4k a week, it is a killer.
Saving £25 a week because of an interest rate cut and £160 on rates really doesn't make fudge all difference in this situation.
Don't get me wrong it is nice, but to me it says they really haven't got a grasp how hard this is hitting the UKs largest employment sector at all.