Chancellor considers his Budget options

The countdown is on to Rishi Sunak’s Budget on March 3 with the Chancellor urged to deliver more support for small firms and sole traders.

The Treasury has already confirmed that the much-anticipated speech will “set out the next phase of the plan to tackle the virus and protect jobs”.

It follows Prime Minister Boris Johnson unveiling his ‘roadmap’ to bringing the country out of lockdown.

Federation of Small Businesses (FSB) national chairman Mike Cherry says that plan must be followed with business support as restrictions continue and he urged the chancellor to do deliver on the PM’s “whatever it takes” pledge.

Under the roadmap, non-essential retail outlets and personal care premises such as hairdressers won’t open until April 12 at the earliest. That is also the earliest date that hospitality venues will be able to serve people outdoors only. Indoor hospitality won’t reopen until May 17 at the earliest.

An FSB survey of more than 1,000 small business owners has revealed that one in five have received no financial help at all from the government since the start of the Covid pandemic,

Mr Cherry said: “Whatever it takes means bringing those overlooked by current support measures into the fold, including suppliers, directors and the newly self-employed.

“Upwards of a million small business owners and sole traders are currently receiving no direct help whatsoever.

And he added: “Extension of business rates reliefs and measures to mitigate the burden of emergency debt will provide small firms with some urgently-needed breathing space as they fight to make it through to the summer.”

The FSB also wants to see employer national insurance contributions cut and a reintroduction of a job retention bonus.

The CBI, which represents 190,000 UK companies, is calling on Mr Sunak to deliver a comprehensive reform of the business rates system.

It has also called for the furlough scheme to be extended through to June, with targeted support after that for the worst-affected businesses, such as those in hospitality.

There has also been speculation that the cut to VAT to five per cent, introduced for tourism and hospitality during the pandemic, will be renewed.

As well as support schemes, businesses will also be looking closely for any possible tax hikes and the impact that may have on them.

Earlier this year the chancellor was warned that any rise in corporation tax, to help pay for the cost of support measures for the economy introduced during the pandemic, would be counter-productive.

Government support for the Covid-stricken economy has so far cost more than £250bn.

The corporation tax rate is currently 19 per cent and experts say each percentage point rise would raise £3.4bn for the Treasury.

There has been speculation that the chancellor may look to align rates more closely with income tax. Income tax rates stand at either 20 per cent, 40 per cent or 45 per cent.

There have been reports that Mr Sunak is considering a gradual increase to 23 per cent.

Other steps Mr Sunak could take range from a rise in fuel duty to an online sales tax.

Capital gains tax (GCT) is another area where the chancellor might make changes.

Earlier this year he was said to be considering proposals made by the Office of Tax Simplification (OTS) earlier this year to overhaul the system.