Understandably, at the moment many of you are focussed on the coronavirus so we’ve put together a general summary of the 2020 Budget, including the measures put in place to help small businesses.
Keep in mind, we are not advisors.
If you want to take part or apply for any of the grants we strongly suggest you speak to your accountant right away. They will be able to direct you and facilitate the grants available. At times like this, it is invaluable to have a great accountant on your side.
Rishi Sunak delivered his first Budget as chancellor of the exchequer, amid the backdrop of a growing threat to the economy from the global outbreak of coronavirus.
~ Fiscal rules framework to be reviewed, any changes to be made in the autumn.
~ Growth forecasts cut to 1.1% for 2020 (from 1.4% previously) and 1.8% for 2021, but this does not account for coronavirus impact.
~ Inflation forecast to be 1.4% for this year.
~ UK living wage targeted to hit £10.50 an hour by 2024.
~ New spending review to be concluded in July.
~ Day-to-day spending will be £100bn in cash terms by the end of the parliament.
~ Largest sustained fiscal boost in nearly 30 years, according to the OBR.
~ Public spending will grow 2.8% a year, twice as fast as the economy.
~ Coronavirus will have “significant”, but “temporary” impact on UK economy.
~ Fiscal stimulus package worth £12bn directly related to the outbreak.
~ NHS will get whatever funding it needs — be it “millions or billions”.
~ £5bn coronavirus emergency response fund for the NHS.
~ £500m hardship fund to directly support vulnerable people.
~ Business rates abolished for one year for small businesses in heavily hit sectors, such as hospitality.
~ Government to backstop sick pay for small business for up to 14 days.
~ Sick leave will also be made available from day one, including for those self-isolating.
~ Temporary removal of minimum floor for universal credit.
~ Temporary loan scheme to support small and medium sized businesses, with government guarantees of 80% of losses with no fees.
~ £3,000 cash grants for small businesses that pay no business rates, costing £1bn in total.
~ Road building and upgrading plans equal to “£27bn of tarmac” between 2020-25.
~ Investment in broadband worth £5bn to help expand rural connectivity.
~ New carbon capture “clusters” to be built by 2030, at a cost of £800m.
~ Affordable housing programme expanded with extra £12bn of funding.
~ New £2.5bn “pothole fund”.
~ Pensions taper thresholds increased by £90,000.
~ National insurance threshold to rise from £8,632 to £9,500.
~ Fuel duty frozen again.
~ Increase on spirits duty and beer duty cancelled, business rate discount for pubs raised from £1,000 to £5,000.
~ Levy on gas to rise, but to be frozen on electricity.
~ £500m for rollout of new electric car charging points.
~ Diesel subsidies will be scrapped for most sectors, excluding agriculture.
~ New plastic packaging tax on non-recyclable materials from April next year.
~ Money for flood defences doubled over the next six years to £5.2bn.
~ New NHS funding amounting to £6bn.
~ Corporation tax frozen at 19%, reversing previous plan to cut it to 17%.
~ Measures to clamp down on tax avoidance aimed at helping HMRC recoup £4.4bn of unpaid taxes.
~ Increased lending for exporters worth £5bn.
~ Entrepreneurs’ relief lifetime limit cut from £10m to £1m.
~ Investment in R&D to increase to £22bn a year.
~ New safety fund worth £1bn to deal with unsafe cladding on buildings over 18m.
~ Funding worth £650m to help rough sleepers.
~ Stamp duty surcharge of 2% on non-resident buyers.
~ £130m to extend start-up loans.
~ VAT abolished for books, newspapers and magazines.
~ Tax employment allowance increased by one-third to £4,000.
What to look out for:
We have to get used to the fact that although the government has targeted the living wage to hit £10.50 an hour by 2024, realistically this is probably going to come sooner. Especially if you consider the government has pledged to end the era of what they call cheap labour from Europe.
It is still a little early to see how this pans out, but abolishing businesses rates for a year for small businesses could be a lifesaver with everything happening at the moment.
As coronavirus is taking grip of the nation, the government has pledged to cover sick leave from day one. How this claimed will be left to see.
The gas levy will rise, but it is fixed it on electric. I do think that this plays well into the climate change agenda; it is one to watch for the future. Diesel subsidies will be terminated for every sector (excluding agriculture), this will impact the local fishing fleet that relied on cheaper fuel.
We might be a few years off, but how long before gas is not economically viable?
In trend with above, the government has pledged to tax non-recyclable packaging. How will this work with packaging that cannot be recycled because it has been tainted by food?
We are interested to see how this is unpacked over the coming months.
If you want to read more about the budget we have compiled a reading list below: