Budget 2020: Delivering on promises to the British people
Rishi Sunak's first budget was delivered against the challenge of the global outbreak of Coronavirus (COVID-19). This budget aimed to deliver on change, providing security today alongside providing a plan for prosperity tomorrow from a government that gets things done.
Coronavirus COVID-19 will cause temporary disruptions to the economy having a significant impact, but the Chancellor reassured that this would be temporary and the economy will recover. A 3 point plan is being implemented to help provide security and support for those off work including changes to Statutory Sick Pay (SSP).
For COVID-19 cases, SSP will be paid from the first day of sickness instead of the fourth day. This is also the case for those who are self-isolating. A sick-note from calling 111 will be acceptable instead of having to visit your GP
For employers with fewer than 250 employees, SSP costs will be refunded by the government for the first 14 days
HMRC will be setting up a dedicated COVID-19 helpline to help those in need
Business rates NIL for Retail, Leisure and Hospitality businesses. (Small Business Rates relief). Pubs will get discount of £5,000
Small business grant funding, a loan is available for up to £1.2m due to "business interruption".
There were calls for Entreprenuers' relief to be scrapped as the Government believe it only benefited a small number of taxpayers. However, the UK wants to generate additional entrepreneurial activity and so will instead reduce the lifetime limit down from £10m to £1m from 11th March 2020
Employment allowance for relief on employers national insurance will increase from £3,000 (2019/20) to £4,000 (2020/21)
R&D expenditure credit will be increase from 12% to 13% from 1st April 2020. supporting businesses investing in R&D helping to drive innovation in the economy.
The reduction in corporation tax down to 17% has been scrapped, and will remain at the current rate of 19%
Off payroll working (IR35) changes will come into effect from 6th April 2020 as planned
National Minimum and Living Wage increase to £10.50 by 2024. The NLW from April 2020 will be £8.72
National Insurance Tax threshold increase from £8,632 to £9,500
The personal allowance will stay the same in 2020-21 at 12,500 with the basic rate threshold also staying at £50,000
New tax charge on plastic packaging from April 2022. Manufacturers and importers whose products that have less than 30% recyclable material will be charged £200 per tonne
Growth in the economy is forecast to be 1.1% in 2020 and 1.8% in 2021, with the years after this being 1.5%, 1.3% & then 1.4% in 2024
The deficit this fiscal year (2019-20) is now forecast to be 2.1% of GDP, rising to 2.4% in 2020-21 and 2.8% in 2021-22
Inflation is forecast to be 1.4% in 2020 & 1.8% in 2021
A Budget that 'gets it done', as the Chancellor mentioned over a dozen times. With spending for the NHS, housing and research & development, it was certainly less of an austerity Budget that we'd become accustomed to. Rishi Sunak's first Budget after being in the job for a month was to lead the UK to being 'brave & bold, taking decisions now for our future prosperity'.
However, with no mention of IR35 and the off-payroll changes in Rishi Sunak's speech, the Red Book itself confirmed the reforms will be included in the Finance Bill 2020.