Eye-catching budget puts Sunak in the spotlight
The new Chancellor of the Exchequer delivered the first Budget of the 2020s in a post-Brexit world, dominated by fears over the coronavirus. The proposals were expected to be big and they certainly caught the eye. Our Director of Tax, NEIL MOON reviews the developments.
Chancellor Rishi Sunak's first Budget was eagerly awaited – not least because he unexpectedly took over the helm just a few weeks ago, following the sudden resignation of his predecessor, Sajid Javid.
Some of the announcements were quite widely trailed before today, namely the increase in the National Insurance threshold to £9,500, the change in the rate of Research & Development Expenditure Credit from 12% to 13% and the Structures & Buildings Allowance rate from 2% to 3%.
Understandably, it was Coronavirus (COVID-19) that took the opening headlines with the Chancellor setting out his strategy:-
- For the NHS – whatever 'it needs to cope', with a promise of a £5bn emergency response fund.
- For the public – Statutory Sick Pay from the first day of self-isolation; self-employed workers able to claim contributory Employment Support Allowance from day one.
- For businesses - 14 days SSP funded for businesses with fewer than 250 employees; HMRC time-to-pay arrangements to be scaled up; new temporary business interruption loans 80% backed by the Government; business rates abolished for some smaller businesses in the retail, leisure and hospitality sectors, with a rateable value below £51,000.
Some of the other key highlights were as follows:-
- National Minimum Wage to increase to £10.50 per hour by 2024
- 5% VAT on women's sanitary products to be scrapped
- Fuel duty to be frozen for the 10th consecutive year
- Duties on spirits, beer cider & wine to be frozen
- Business rate discounts for pubs to rise from £1,000 to £5,000
- Firms eligible for small business rates to get a £3,000 cash grant
- Entrepreneurs' Relief retained, but the lifetime allowance down from £10m to £1m
- Tax paid on pension contributions of high earners, including medical professionals working in the NHS, to be recalculated
- VAT on digital publications to be scrapped from December
- Plastic packaging tax to come into force from April 2022
- Subsidies for 'red diesel' used in off-road vehicles to be scrapped in two years, but to remain for farmers and rail operators
- Investment in flood defences to be doubled over next 5 years
- 2% Stamp Duty surcharge for non-resident buyers of UK properties from April 2021
- More than £600bn to be spent on roads, rail, broadband and housing by the middle of 2025
- £2.5bn available to fix potholes & resurface roads over next 5 years
The Chancellor reiterated that this was a Budget by a Government that 'gets things done'. We shall wait and see…
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