The Budget on 3 March was a much-anticipated one as Chancellor Rushi Sunak announced the government’s stand on corporation taxes. While the country is still in a complete lockdown until 21 June, finance experts and business leaders appealed to the Chancellor to favour the country’s businesses. The pandemic led to significant losses for large and small companies alike, and everyone looked up to the government to bail out the economy.
Marvin Rust, managing director, Tax division at Marsal & Alvarez, said, “We need policies that cover at least the medium term to the end of this parliament, a pro-economic growth strategy to increase GDP growth and focus on industries where we are leading the world, such as biotech.”
He further adds: “It would be good to see an enhancement of the R&D tax credit scheme, investment in infrastructure and in freeports, an important part of government policy after Brexit.”
Recovery from Covid
There have been constant efforts to support businesses during the pandemic: Pandemic loans and furlough schemes and support for the self-employed that required billions. Even so, with the lockdown to continue, there is a general agreement that the government must increase its Covid-19 support funds. All the current schemes have a due date of 30 April, which will leave two months where several businesses won’t fully function.
John Cullinane, head of tax policy, Chartered Institute of Taxations (CIOT), says, “There are some significant gaps in the schemes. At the beginning, people were impressed by the job retention scheme (JRS) and later the self-employed income support scheme (SEISS), but these measures came at the expense of those excluded. The longer it has gone on, the more you have to question the approach, for example, on directors of owner-managed businesses. If this is going on for another four months, you would want some extensions to include excluded groups, but you don’t get the impression that will happen.”
Capital gains tax
The Office of Tax Simplification reviewed the capital gains tax (CGT), which raised speculations that the Chancellor might consider aligning CGT rates and income tax rates. The situation appears to be grim since the OTS has not submitted the second report on the tax reforms that were due long ago.
Rust added: “We can expect to see some changes around the edges, what the government would call loopholes. Raising CGT rates in line with income tax rates would be a backward step and should not be introduced. It would be a mistake and would choke off investment by entrepreneurs.”
Time off for vaccination
Meanwhile, the debate over whether employers should provide time off for vaccination is heating up. The UK government has already approved various Covid-19 vaccines, and they are on the verge of offering them to the public following their priority-based strategy. The government is aiming to vaccinate all the adults by the end of July.
The situation has made employers wonder if they should allow their staff a paid time off for vaccination. The employer must remember that whether they should allow a paid time off will only emerge if the employees have their appointment during the working hours. These vaccine appointments are fixed depending on the priority list where thousands of others are yet to be vaccinated. It means that employees cannot potentially reschedule their dates, and thus, vaccines appointments cannot be treated like other medical appointments.
There are no fixed laws in the country that would force an employer to allow a paid time off for medical appointments, including Covid-19 vaccination. The final decision depends on the business requirements and how much impact the vaccination will have on employee’s performance.
The current economic situation directs a more significant monetary bailout from the government. If the government fails to offer a better plan until June, hundreds of businesses might cease to exist. The financial pressure is too big that it requires urgent steps if the economy is to recover. While the Budget decides on the economic front, employers must consider all the possibilities of granting and denying time off. As there are no legal obligations surrounding vaccination, employers can treat it like other medical appointments.