Summary of Budget 2020: How does this affect you and your business?

Chancellor Rishi Sunak has delivered his Budget in the House of Commons, announcing the government’s tax and spending plans for the year ahead. Topics spoken about were the Coronavirus response, personal taxation, alcohol, our environment and more.

Below is a short summary of the Chancellor’s budget.

Coronavirus Response

  • £5bn emergency response fund to support the NHS and other public services
  • Statutory sick pay will be paid to all those who are advised to self-isolate, even if they have not presented with symptoms
  • Self-employed workers who are not eligible for sick pay will be able to claim contributory Employment Support Allowance
  • £500m hardship fund for councils to help vulnerable people
  • Small firms will be able to access "business interruption" loans of up to £1.2m

National Insurance, Pensions and Savings

  • The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500
  • For those on salaries above £9,500, it will save them on average £85 a year
  • Tax paid on the pensions of high earners including doctors, to be recalculated
  • People can put a lot more into tax-free savings for children. The allowance for Junior ISAs (Individual Savings Accounts) and Child Trust Funds will be increased from £4,368 to £9,000 in April.
  • Living wage to rise by 6.2% - £8.72 an hour from April 2020

Alcohol, Fuel and Shopping

  • 5% VAT on women’s sanitary products, known as tampon tax, to be scrapped
  • Fuel duty to be frozen for the 10th consecutive year
  • Duties on spirits, beer, cider and wine to be frozen
  • Tobacco taxes will continue to rise by 2% - this will add 27p to a packet of cigarettes and 14p to a packet of cigars
  • Business rate discounts for pubs to rise from £1,000 to £5,000 this year

Business and Science

  • Firms eligible for small business rates relief will get £3,000 cash grant
  • £5bn to be spent on getting gigabit-capable broadband into the hardest-to-reach places
  • VAT on digital publications, including newspapers, books and academic journals to be scrapped from December
  • An extra £900m for research into nuclear fusion, space and electric vehicles

Environment and Energy

  • Plastic packaging tax to come into force from April 2022
  • Manufacturers and importers whose products are less than 30% recyclable will be charged £200 per tonne
  • £120m investment in emergency relief for communities affected by this winter’s flooding and 200m investment in flood resilience
  • Total flood defences investment to be doubled over the next five year to £5.2bn

Transport, infrastructure and housing

  • More than £600bn is set to be spent on roads, rail, broadband and housing by the middle 2025
  • There will be £27bn investment for motorways and other key roads
  • £2.5bn will be made available to fix potholes and improve roads over the next 5 years
  • £650m package to tackle homelessness and 6,000 places for rough sleepers
  • Stamp duty surcharge for foreign buyers of UK property to be levied at 2% from April 2021

This a brief summary of the Budget 2020, if you would like to read more about the Budget 2020 and see how it may be affecting you and your business, read the full article on the BBC website.