Budget 2020: A wrap up of this year’s event
The Chancellor Rishi Sunak has delivered his first budget since taking over from Sajid Javid last month. The first post-Brexit budget has seen the sudden addition of measures to support the country through the coronavirus outbreak, along with the rest of the usual points addressed in the budget. We’ve put together a quick wrap of this year’s event.
Personal tax, pensions and wages
• The Nation Insurance contribution threshold will rise from £8,632 to £9,500. This will take around 500,000 employees out of the tax completely, and other workers earning more than £9,500 will be about £85 better off each year
• The ‘tampon tax’, the 5% VAT on women’s sanitary products, will be scrapped
• The tax on high earner’s pensions will be recalculated
Alcohol, tobacco and fuel
• Duty on beer, cider and spirits will be frozen
• Pub’s business rate discount will rise from £1,000 to £5,000
• Tobacco taxes will rise by 2%
• Fuel duty will be frozen for the 10th year in a row
Energy and the environment
• A tax on plastic packaging will come into effect in April 2022
• Red diesel subsidies will be scrapped for most sectors in two years, remaining for farmers and rail operators
• Manufacturers and importers will be charged £200 per tonne of product that has less than 30% recyclable material
• Investment in flood defenses will double to £5.2bn over the next five years, with £120m emergency relief pledged to communities affected by flooding
• Natural habitats will be protected with a £640m “nature for climate” fund
Infrastructure, housing, and transport
• £600bn is to be spent on rail, roads, broadband, and housing by 2025
• £2.5bn has been pledged for potholes and road resurfacing
• To tackle homelessness, a £650m fund will provide 6,000 extra places for rough sleepers
• Colleges will receive £1.5bn for building upgrades
• A £1bn fund will remove all combustible cladding from housing that is higher than 18 meters
Several measures have been taken to soften the blow of the virus on workers, with anyone who is advised to self-isolate entitled to statutory sick pay, even with no symptoms. Self-employed workers will be able to claim Employment Support Allowance, with this available from day one rather than a week after. Other measures include:
• The abolition of business rates for companies in retail, leisure and hospitality sectors with a value below £51,000
• Businesses with less than 250 staff will receive a refund for sick pay payments for two weeks
• Small firms will be given access to business interruption loans of up to £1.2m
• A £5bn emergency response fund has been pledged for the NHS and other public services
• £6bn in extra funding has also been pledged to the NHS for recruitment and hospital upgrades over the next five years
The economy and public finances
The economy is predicted to grow by 1.1% this year, a revision down from last year’s 1.4%. This figure doesn’t take the impact of the coronavirus into account. However, growth is predicted to recover to 1.8% in 2021-22. The government will also borrow £14.6bn more than was initially forecast, with total additional borrowing of £96.6bn by 2023-24 to pay for all of the budget’s spending pledges.
Whatever the effect of this year’s budget on your personal finances or your business, we are here to help. Our team of accountants, auditors, and business advisors will be ready to provide you with the essential advice that you need.
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