Chancellor of the Exchequer Rishi Sunak today unveiled the new Conservative government Budget for 2020.
Sunak’s speech was made confidently despite the added pressure of the coronavirus outbreak and he promised to invest massive amounts of money into the NHS, UK businesses, and environmental issues amongst other things.
This article will focus on what the 2020 Budget does to combat the immediate threat of the coronavirus and how some of the changes are aimed at supporting smaller businesses, those on low-wages and the self-employed.
COVID19: Budget adjustments
Sunak dedicated the first part of his speech to the coronavirus, assuring the public that the main concern of the government is to make sure everyone is ‘healthy and financially secure’ during this tough time.
He re-told some statistics that most of us have heard before, but are no less worrying – such as the fact that one fifth of the UK’s workforce may be off sick due to the coronavirus.
Sunak is setting aside an initial £5bn for the NHS, to make sure that it gets what it needs during this viral outbreak. This money will go towards supporting staff, buying supplies and potentially bringing back recently retired medical staff to help deal with the situation.
More money will be allocated to the NHS if necessary.
Statutory Sick Pay
The coronavirus means more people than usual will be unable to work, that is a simple fact.
Boris Johnson has already announced that SSP will be available to those who must stay home due to having coronavirus symptoms from the first day of sickness (rather than from the usual fourth day of sickness).
Sunak has now confirmed that those choosing to self-isolate, even if they are showing no symptoms, will also be able to claim SSP. This is extended to the self-employed as well.
Also, contributory employment Support Allowance benefit claimants will be able to claim sick pay on day one, not after a week.
What’s more, Sunak has promised that firms with fewer than 250 staff will be refunded for sick pay payments for two weeks.
Sunak announced a £500 million hardship fund which is to be used by local authorities to help vulnerable people in their areas.
Big news for small businesses
A massive announcement was that business rates will be abolished for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000. This means that these businesses will not need to pay tax on occupying the building which they operate out of. This will be a significant saving for these firms, and will definitely help in terms of making money back up from the losses incurred due to coronavirus.
Where even smaller businesses already do not pay this tax, they will be able to apply for a £3,000 cash grant to aid them through this time.
Coronavirus temporary loan scheme
The temporary scheme, which will cover the cost of salaries and bills, will offer loans of up to £1.2 million to support small and medium-sized businesses.
The government will cover up to 80% of these loans with no fees, meaning banks can lend to businesses with confidence.
Sunak said: “This will unlock up to £1bn of attractive working capital loans to support small businesses, with more as needed.”
Personal taxes and wages
The National Insurance Contributions tax (NIC) threshold will rise from £8,632 to £9,500 – saving people just over £100 a year.
Isolated areas to get better internet connection:
People living in areas which are currently experiencing poor connectivity will see a £5bn investment to improve their service, which the government hopes will improve communication and opportunity within such areas.
Other points to note:
- Fuel Duty to be frozen for the 10th consecutive year
- Duties on spirits, beer, cider and wine to be frozen for the coming tax year
- Business rate discount for pubs will be £5,000, up from £1,000
- From January next year there will be no VAT whatsoever on women’s sanitary products.
- A new ‘plastics packaging tax’, charging manufactures and importers £200 per tonne on packaging made of less than 30% recycled plastic.
These are just some of the main points we have taken from today’s Budget 2020 speech. If you have any questions about how these changes might affect you, or if you need any other legal advice please get in contact today.
Call on 020 7928 0276, or email into firstname.lastname@example.org.