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Budget 2020

The newly appointed Chancellor, Rishi Sunak, delivered the 2020 Budget this afternoon in the House of Commons, splitting this into two areas; the first focused on support to combat Coronavirus and the second on the Main Budget. We have summarised the main headlines in this article:

Coronavirus

  • £30bn of additional stimulus was announced to combat the impact of Coronavirus on businesses and individuals:
    • Individuals will be eligible for statutory sick pay from day 1
    • The Government will fund Statutory Sick Pay in full for 2 weeks for businesses with less than 250 employees
    • A new coronavirus business interruption loan scheme will see banks offer loans of up £1.2m to support SME’s

Main Budget

Infrastructure

  • £12.2bn to help build affordable homes across the country
  • Over £1bn for infrastructure to build nearly 70,000 new homes
  • £6bn of new funding to support the NHS to deliver 50,000 more nurses, 50m more GP surgery appointments and to build 40 new hospitals
  • £1.5bn of new capital over five years to improve FE college buildings and facilities
  • £510m to get 4G mobile coverage to all areas of the UK
  • £500m to support roll out of new rapid charging hubs, so drivers are never more than 30 miles from being able to charge their vehicle
  • £1bn building safety fund to remove dangerous cladding
  • £2.5bn over next five years to fix potholes and maintenance of roads

Businesses

  • Cash grants of £3,000 to any business currently eligible for small business rates relief
  • Entrepreneurs relief lifetime limit reduced from £10m to £1m
  • Increasing investment in R&D to £22bn a year, the largest and fastest increase in R&D investment on record
  • £5bn of new export loans for businesses
  • £130m of new funding to extend start up loans for entrepreneurs in 2021-22

Climate

  • From April 2022, manufacturers and importers will be charged £200 per tonne on packaging made of less than 30% recycled plastic
  • £5.2bn over next 6 years for flood and coastal defences

Tax and benefit changes

  • Research and Development Expenditure Credit (RDEC) rate increased from 12% to 13%
  • Structural and Building Allowances (SBA’s) increased from 2% to 3%
  • Employment Allowance increased from £3,000 to £4,000
  • The National Insurance threshold will be raised £8,632 to £9,500 from next month, giving 31 million individuals a tax cut
  • Corporation Tax rate will remain at 19%
  • Fuel duty remains frozen along with all alcohol duties
  • Reading tax abolished from 1st December 2020
  • Diesel tax relief abolished
  • 2% stamp duty surcharge for non-UK residents
  • A one-year break from NI contributions for employers of veterans
  • Abolishment of tampon tax from 1stJanuary 2021