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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 1^st 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 1^stJanuary 2021