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Budget 2020 - Sunak's Spending Spree

Budget 2020 - Sunak's Spending Spree

Rishi Sunak's budget anouncements yesterday were heavily influenced by the Corona virus crisis. The Governments move to refund the cost of the first 14 days of Statutory Sick Pay (SSP) per employee, to businesses with under 250 employees, will go a long way to relieve the pressure on SME's. The commitment that SSP will be paid from Day 1 to all those advised to self -isolate, whether showing symptoms or not, will be a relief to many.

However, little detail has been given about those workers who do not qualify for SSP, that is those who earn less than £118 per week. The easing of rules around receiving Employment and Support Allowance (ESA) and Universal Credit (UC), announced today, may go someway to help.

SME's to get help coping with crisis

It was not just the Sick Pay worries of small UK businesses that Sunak's budget addressed. The announcement that most SME's in England, with a rateable value under £51,000, will not pay any business rates this coming year, was a big plus. 

A cash injection of £3,000 will be available to businesses in Coronavirus induced trouble who qualify for the Small Business Rate Relief. If, or let's be realistic, when, more help is needed by SME's, access to the new temporary Corona Virus Business Interruption Plan Scheme will be possible. This is a Government backed loans scheme, that banks will be making available.

Rishi also promised that HMRC will be donning their helpful caps and setting up a dedicated helpline for SME's and those Self Employed who need a deferral period on their tax liabilities, due to the corona virus crisis.

Personal Taxation

No changes were announced to personal tax rates or thresholds. An increase in the National Insurance thresholds means the average employed person will be £104 better off next year (about £78 for the self-employed).

A few days late to make the International Woman's Day, but women in the UK will soon pay 5% less for sanitary products as the so-called 'Tampon Tax' gets a kick in the nuts.

Sunak read the mood of the nation correctly and left beer, wine and spirits alone! Tough times ahead and increasing the cost of a pint would have been ill advised! "The Local" even got another boost as business rate discounts for pubs will rise from £1,000 to £5,000 this year.

Other points of note

The planned decrease of Corporation Tax has been shelved. Just as well really as there is a heck of a lot of spending that has been announced and not a lot of tax increases. Borrowing will be up!

There was a nod to the housing crisis with £600m being set aside to get rough sleepers into homes. £12bn was announced for Affordable Homes, though what "Affordable" actually means to this goverment is anyone's guess.

A Stamp duty surcharge of 2% for non-UK residents, will also be implemented from 2021.

Greening it up

A new Plastic Packaging Tax to be introduced from April 2022. Manufacturers and importers whose products have less than 30% recyclable material, will be charged £200 per tonne.

With the rain still pouring, the announced £120m to help winter flood defences and £200m funding for local communities impacted by flooding, is a welcome move.

The £640m "Nature for Climate Fund" to protect natural habitats, and creating 30,000 hectares of newly planted trees will be a small step in the right direction for climate activests.

Most important of all

A £2.5bn pothole fund was announced to sort out the nations road surfaces. Pretty sure that much tarmac will negate the £640m "Nature for Climate Fund' ?

Have a look at our more detailed list of the Budget highlights.