The key points on the economy
Whilst a year ago, it was predicted the UK economy would grow by 1.4% this year, Mr Sunak reduced the figure to 1.1% making it the slowest growth period since 2009, however it is expected to boost back up to 1.8% for the following year. With a 1.4% inflation forecast and borrowing increasing to £14.6bn equivalent to 2.1% of GDP, the Chancellor assured that debt as a percentage of GDP would be lower than at present, at the end of the current Parliament.
The key points for businesses
Coronavirus
Businesses with under 250 employees will be refunded sick pay payment for 2 weeks. Business interruption loans of up to £1.2m will also be made available for small firms.
Business rates
Following the announcement that shops, cinemas, restaurants and hotels with a rateable value of less than £51,000 will be eligible for a business rates holiday due to Coronavirus, Mr Sunak also revealed that the overall system for High Street business rates will be reviewed later in 2020. Other good news included a £3k grant for firms eligible for small business rates relief, as well as a £4k uplift in business rate discounts for pubs to £5k from £1k.
Entrepreneurs’ Relief
In the last announcement it was stated that legislation will be introduced in the Finance Bill in relation to Entrepreneurs’ Relief, and today it was confirmed that Entrepreneurs' Relief will be retained, but lifetime allowance will be reduced from £10m to £1m.
VAT on Digital Publications
VAT will be scrapped on digital publications from December 2020, including newspapers, books and academic journals. Take a look at our recent blog to find out more on this.
Broadband connections
A much needed £5bn will be allocated to ensuring gigabit-capable broadband will be available in the most difficult-to-reach places across the country.
R&D
There will be an additional budget of £900m towards research into nuclear fusion, space and electric vehicles.
Environmental contribution
To help reduce the country’s carbon footprint and contribution to plastic waste, a new tax will come into place in April 2022 on plastic packaging. Manufacturers and importers using less than 30% recyclable materials will be charged £200 per tonne. In addition, other than for farmers and rail operators, subsidies for ‘red diesel’ will be abolished within 2 years Mr Sunak has said.
The key financial points for individuals
Coronavirus
Employees that have been advised to self-isolate even if you don’t have symptoms, you will be entitled to SSP, with self-employed workers being entitled to claim contributory Employment Support Allowance, available from day 1.
National Insurance tax benefits
Originally announced in November 2019, it was reiterated by Mr Sunak that the tax threshold for NICs contributions will increase by £868 to a round figure of £9,500, taking 500,000 people out of the tax and allowing anyone earning over the new threshold to be around £85 better off per year.
Pensions
It was also announced that changes would be made to the tax paid on pensions of higher earners including doctors, however it was not stipulated what the recalculations would be.
Property
Foreigners buying property in England and Northern Ireland will have the stamp duty surcharge levied at 2% from April 2021.
If you have any queries or concerns as a result of the spring Budget, please contact a member of the LWA team in Manchester on 0161 905 1801, or in Warrington on 01925 830 830. You can access the 2020 Budget documents on the Government website here.