Spring Budget 2020: Everything you need to know
11th March 2020
Understandably, in a budget speech dominated by Covid 19 there were few surprises in this speech. However, before we breathe too big a sigh of relief, this comes with the caveat that the devil is in the detail and we will still need to carefully review the budget documents which are published. But for now, sit back and enjoy our budget summary:
Covid 19 featured heavily in this budget and the Chancellor chose to tackle this head-on. Acknowledging both the health challenges posed as well as the economic impacts he went on to outline the government’s overall aims as well as its strategy for dealing with this.
In the next statement he confirmed that whilst Covid 19 was a significant challenge it would have a significant impact on the economy but this would only be temporary, it was not the only challenge we faced. In terms of dealing with this, I wonder if “This Government Got It Done” will be shouted from the rooftops anytime soon?
There was the promise that the government is doing everything it can to keep the country health and financially secure and to protect the economy. With a rhetoric of “this budget will do that” and “this is a budget for security today and prosperity tomorrow”, the scene is set.
Given the reference to the temporary nature of the Covid 19 crisis, there were a package of measures that would also be temporary to safeguard the economy from these as part of the government strategy. In essence, the focus here was to provide safety and security to individuals and wider businesses to mitigate the impact. The response was intended to be “temporary, timely and targeted”.
The package of measures forming the 3 point plan announced are:
- Whatever the NHS needs in order to cope with the crisis it will get – WHATEVER THE COST (quite a bold statement and not just in this article).
- Statutory Sick Pay (SSP) and the equivalent related benefits, universal credit and benefits available to the self-employed to be improved in terms of eligibility requirements and reduced timescales to access these.
- Job security by providing support to small businesses (less than 250 employees) to include:
- As it is anticipated that up to 20% of the workforce could be unavailable at any one time, the total cost of providing SSP for 14 days in Covid 19 cases will be refunded to employers in full
- HMRC’s time to pay service is being scaled up with a dedicated helpline being created from today
- A government backed loan scheme is created for loans of up to £1.2M to get through this period which is projected to unlock £1Bn of capital
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Pre-budget measures were proposed to provide 50% relief to leisure, retail and hospitality businesses with a rateable value of up to £51,000 were announced. This has been increased to 100% relief for one year. In addition, the businesses eligible for this has been extended to cover additional businesses. Those businesses who will not benefit from the relief will be eligible for a £3,000 cash injection.
Rates reductions for pubs has been increased from £1,000 to £5,000 as part of these measures.
An overall review of the rates system has been ordered for the autumn.
The anticipated increases to wine, beer and spirits have been frozen for a year – PARTY TIME!
In addition, the increase in fuel duty has also been cancelled
The National Insurance threshold has increased from £8,632 to £9,500 – this was the only significant personal tax change.
The much-awaited announcement in respect of Entrepreneurs Relief is now upon us and as anticipated, whilst there has been a change which takes the form of a reduction to the lifetime allowance from £10M to £1M, it has survived.
There was a further pledge to redistribute the savings from this change amongst business as follows:
- R & D expenditure credit is increased from 12% to 13% – This is the cash equivalent a business can claim in respect of their qualifying R&D claim in lieu of tax relief
- Structure & Buildings allowance increased from 2% to 3%
- Employment allowance increased by 1/3 from £3,000 to £4,000
To find out what our take on the budget is and how it will impact you, contact me (Phil).
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