Budget 2020: How Does It Affect Your Business?
Today the Chancellor set out the budget for 2020.
Due to the anticipated economic impact of CoronaVirus, there are some temporary measures in there that will last for one year and we have shown these separately.
Temporary CoronaVirus Measures
- Statutory Sick Pay will be paid from day one for those self-isolating, even if don’t have symptoms.
- Can get sick note by calling 111 instead of going to doctors.
- 14 days Statutory Sick Pay due to CoronaVirus will be refunded to employers (with less than 250 employees) by the government.
|Self Employed/ Gig Economy
- Employment & Support Allowance can be claimed from day one.
- Removal of Minimum Salary Threshold
- Relaxing requirement to physically attend jobcentre.
- Time to Pay scheme allowing businesses to defer tax payments and new dedicated phone line available now.
|Temporary Business Loans
- Loans available from banks for small and medium companies will be backed 80% by the government.
|Business Rates Relief
- Any business eligible for small business rates relief can get £3000 cash grant.
- Any small business in retail, hospitality or leisure sectors has business rates abolished for 1 year.
- Bank of England reduced rates from 0.75% to 0.25% immediately
|National Insurance Threshold
- Raised to £9500, so you can earn £792 per month before paying National Insurance from April.
|National Living Wage (Minimum Wage)
- Increase to £8.72 an hour from April
- (other increases for Apprentices e.t.c. – https://www.gov.uk/national-minimum-wage-rates)
- Increase to £4000 from April (this reduces the national insurance you pay from taking on new staff).
- Extra relief for first year if you employ armed forces veterans.
- All alcohol duties are frozen.
- Fuel duty also frozen for another year (but tax relief on Red Diesel abolished from 2022)
|Research and Development
- Allowance raised from 12% to 13%
- Lots of funding for new R&D facilities.
- VAT abolished on women’s sanitary products and, from December, on digital books and publications.
- 5 Billion for export loans, 330 million for business loans.
- Reduce lifetime limit down to £1 million
The government has announced lots of extra funding for its priorities – NHS, Education, Housing, Research & Development, Infrastructure (Roads/ Rail, Broadband), and the Environment.
Some notable measures include:
- £600 billion spending on infrastructure by 2025.
- £500 million for rapid electric charging hubs and funding to reduce the costs of electric vehicles.
- £640 million for new “Nature for Climate” Fund to restore woodlands and peat bogs
- £320 million for flood defences
- £5billion to bring gigabit broadband to hardest to reach and £510 million to bring 4G coverage to rural areas to ensure full mobile phone coverage across country.
- £22bn in R&D including building new science institutes.
- From 2022 the climate change levy on gas bills will increase.
- A Plastic Packaging tax will be introduced in April 2022 for packaging that less than 30% recycled.
- £2.5 billion pothole fund
- £27 billion on many new roads
- Funding per pupil in schools to rise 4%
- Changing the way government allocates infrastructure funding from what gives the best return, to a focus on improving the economies of the different regions.
- £4.2 billion extra for places with mayors to improve transport.
- By 2024 National Living Wage will rise to 66% of median income – £10.50 an hour.
- £5000 business rates discount for pubs.
- Migrant NHS charge increasing to £624
- A surcharge of 2% on stamp duty for non-resident buyers of housing from 2021.
- £650 million for helping reduce rough sleeping/ homelessness
- £12 billion affordable homes programme
- Pensions taper thresholds rising to £200,000.
- £6 billion extra funding for NHS on top of previous £34 billion increase.
- Public spending to rise by 2.8% a year.