Following the Chancellor’s 2020 Budget speech earlier this month, below is a summary of the key points which may have an effect on you personally and/or your business:
Personal taxation, wages and pensions
- The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500
- The move, first announced in November, will take 500,000 employees out of the tax altogether
- Those earning more than £9,500 will be, on average, £85 a year better off
- 5% VAT on women’s sanitary products, known as the tampon tax, to be scrapped
- No other new announcements on income tax, national insurance or VAT
- Tax paid on the pensions of high earners, including NHS consultants, to be recalculated to address staffing issues
Alcohol, tobacco and fuel
- 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% above the rate of retail price inflation
- This will add 27 pence to a pack of 20 cigarettes and 14 pence to a packet of cigars
- Business rate discounts for pubs to rise from £1,000 to £5,000 this year
Business, digital and science
- System of High Street business rates to be reviewed later this year
- Firms eligible for small business rates relief will get £3,000 cash grant
- Entrepreneurs’ Relief will be retained, but lifetime allowance will be reduced from £10m to £1m
- £5bn to be spent on getting gigabit-capable broadband into the hardest-to-reach places
- Science Institute in Weybridge, Surrey to get a £1.4bn funding boost
- An extra £900m for research into nuclear fusion, space and electric vehicles
- VAT on digital publications, including newspapers, e-books and academic journals to be scrapped from December
- VAT scrapped on e-books and digital newspapers
Environment and energy
- Plastic packaging tax to come into force from April 2022
- Manufacturers and importers whose products have less than 30% recyclable material will be charged £200 per tonne
- Subsidies for fuel used in off-road vehicles – known as red diesel – will be scrapped “for most sectors” in two years’ time
- Red diesel subsidies will remain for farmers and rail operators
- £120m in emergency relief for English communities affected by this winter’s flooding and £200m for flood resilience
- Total investment in flood defences in England to be doubled to £5.2bn over next five years
- £640m “nature for climate fund” to protect natural habitats in England, including 30,000 hectares of new trees
- Budget gets mixed reaction on green issues
Transport, infrastructure and housing
- More than £600bn is set to be spent on roads, rail, broadband and housing by the middle of 2025
- There will be £27bn for motorways and other arterial roads, including new tunnel for the A303 near Stonehenge
- £2.5bn will be available to fix potholes and resurface roads in England over five years
- Further education colleges will get £1.5bn to upgrade their buildings
- £650m package to tackle homelessness, providing an extra 6,000 places for rough sleepers
- Stamp duty surcharge for foreign buyers of properties in England and Northern Ireland to be levied at 2% from April 2021
- New £1bn fund to remove all unsafe combustible cladding from all public and private housing higher than 18 metres
The state of the economy and public finances
- Economy predicted to grow by 1.1% this year, revised down from 1.4% a year ago
- The figure, which does not take into account the impact of coronavirus, would be the slowest growth since 2009
- Growth predicted to rebound to 1.8% in 2021-22, 1.5% in 2022-23 and 1.3% in 2023-24
- Inflation forecast of 1.4% this year, increasing to 1.8% in 2021-2022
- Government to borrow £14.6bn more this year than previously forecast, equivalent to 2.1% of GDP
- Total additional borrowing of £96.6bn forecast by 2023-2024 to pay for spending commitments
- Debt as a percentage of GDP forecast to be lower at end of current Parliament than now
Nations and regions
- An extra £640m for Scotland, £360m for Wales, and £210m for Northern Ireland.
- Treasury’s Green Book rules to be reviewed to factor regional prosperity into spending decisions
- Treasury to open new offices in Wales and Scotland and civil service hub in the North of England, employing 750 staff
- New £1.8bn devolution deal for West Yorkshire, with elected mayor for region
- Universities outside the south east of England to get lion’s share of extra £400m R&D funding
- £800m for two carbon capture and storage clusters, creating 6,000 new jobs in Teesside, Humberside, Merseyside and Scotland
- Extra £360m for Welsh services promised in Budget
- Devolution deal worth £1.8bn agreed
- NI to receive extra £210m for public services
If you have concerns about any of the above points and would like advice, please contact us.Paragraph
Source: BBC News
