Rishi Sunak delivered his first budget in the House of Commons today, which as expected, was focused on the UK's response to Coronavirus.
On top of the promises made to dampen the effect this will have on the economy, there were further spending promises made.
We have highlighted some of the key areas of the budget below.
Interest Rate Cuts
Earlier this morning the Bank of England has announced an emergency cut in interest rates to help with the effects of the coronavirus outbreak. Policymakers reduced rates from 0.75% to 0.25%, taking borrowing costs back down to the lowest level in history.
The government accept there will be a temporary disruption to the economy with the potential for 20% of the workforce affected by Coronavirus.
In order to dampen the effect on the wider economy Mr Sunak has promised;
- Whatever extra resources the NHS needs, it will get it. "Whether millions or billions, whatever it costs we stand behind our NHS".
- Statutory sick pay from day 1 and not day 4. It will be available for all advised to self-isolate, even if they don't have symptoms and sick notes will be available on 111.
- Self-employed will have access to benefits on day 1 as opposed to day 8 and they are removing the minimum income floor in universal credit. The Government also promised funding for local authorities to support vulnerable people.
- Companies with fewer than 250 employees will be able to apply for Statutory Sick Pay Refunds.
- Businesses will have access to business interruption loans.
- Business rates will be abolished for firms in retail, leisure and hospitality sectors with rateable value below £51,000.
- UK economy predicted to grow at 1.1% this year, this, however, is not taking into account the impact of coronavirus.
- Growth will be higher than expected in 2021 at 1.8%, then 1.5% in 2022 and 1.3% in 2023.
- Inflation to be at 1.4%, and then up to 1.8% in 2021.
- National Insurance threshold to increase to £9,500.
- Tampon Tax abolished.
- Junior ISA for 2020/21 allowance has more than doubled to £9,000 from £4,368.
- Pensions - Tapered Annual Allowance will be increased by £90,000 for threshold and adjusted income. For those whose incomes are over £300,000 the Tapered Annual Allowance will reduce to £4,000.
- Fuel, Spirit, Beer, Cider, Wine duty to be frozen.
- Business rate discounts for pubs to rise from £1,000 to £5,000.
- Entrepreneurs Relief lifetime allowance reduced to £1m, from £10m.
- Additional 2% Stamp Duty Land Tax for non-UK Residents.
Note: This information is based on our current understanding of the 2020 Budget. If you need further guidance please contact one of our advisers.
This information is correct and up to date as of 11/03/2020.
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