UK Budget 2020: Impact for the Commercial Property Sector
This article was originally published on Commercial People.
The first budget of the new Boris Johnson government is set to be unveiled on Wednesday, March 11th but what can the commercial property sector expect?
Expectations amongst businesses and across the commercial property sector are high for the budget – after all, the Conservatives are styled as the party for business.
However, amidst the expectation, there remains a degree of scepticism and reality-checking that this budget will not be as promising as once expected, due to the loss of the previous Chancellor Phillip Hammond and of course, the global health emergency that is the coronavirus.
“We should expect the budget to be a toned-down version from what was promised at the election, largely as a result of saving funds to combat the spread of the coronavirus. Whether an epidemic or pandemic, the disease is more than likely going to impact economic growth in 2020, both in the UK and globally.
“As a result, we expect this budget to be one of stimulating growth for the business, rather than grand announcements. However, the latter will likely come in a later budget in the autumn after the spending review.
“Some of the policy measures we would hope to see to support the sector and market resilience are listed below:”
The government needs to reform the business rates system that is suffocating businesses, especially retailers. The property-based tax raised approximately £31bn last year.
The Conservatives pledged a fundamental review of the system as part of their election manifesto. The speed at which this will now happen is in question, and any relief may come too late for some who face crippling bills. The March budget is a perfect opportunity to outline a review.
Corporation tax was not a political football during the election – does this render it fair play to meddle with? Possibly not, as the rate for corporation tax is set in legislation and therefore, an act of parliament would be needed to change the rate. Johnson had previously pledged that the planned reduction from 19% to 17% on April 1st 2020 would-be-put-on hold if he won the election.
Budget spending is expected to be high. The Chancellor will need to be able to fund a myriad of government election pledges as well as the new battle against COVID-19.
COVID-19, commonly known as coronavirus, is now spreading in significant numbers across the UK and the globe. As a result, it is highly likely that the upcoming budget will include a significant boost for the UK’s public services – and the UK’s NHS in particular.
Improved capacity and resources are crucial for the government’s ability to handle the crisis.
Recent events mean that we cannot help but consider the possibility of a resulting recession and reduction in GDP growth.
Accordingly, the UK government may yet plan to revise its current fiscal rules and adjust its areas of spending in order to keep the country’s economy afloat.
As a general note, the impact of COVID-19 is likely to profoundly change the professional lives of the British public and their relationship with their workspaces.
Flexible or remote working options have long been a growing trend and are likely to become yet more popular as we revise how safe “fixed” office hours and set locations are when faced with an outbreak of this kind.
As a result, instances of remote or home-working and flexi-space may grow significantly.