Chancellor Rishi Sunak has delivered his first Budget in the House of Commons, announcing the Government’s tax and spending plans for the year ahead.
The economy is predicted to grow by 1.1% this year, revised down from 1.4% a year ago. The figure, which does not take into account the impact of the Coronavirus, would be the slowest growth since 2009. However, growth is predicted to rebound to 1.8% in 2021-22, 1.5% in 2022-23 and 1.3% in 2023-24. Inflation is forecast at 1.4% this year, increasing to 1.8% in 2021-2022.
The key headlines from the Budget are:
- £5bn emergency response fund to support the NHS and other public services
- Statutory sick pay will be paid to all those who are advised to self-isolate, even if they have not presented with symptoms
- Self-employed workers who are not eligible for sick pay will be able to claim contributory Employment Support Allowance
- The ESA benefit will be available from day one, not after a week as now
- £500m hardship fund for councils to help the most vulnerable in their areas
- Firms with fewer than 250 staff will be refunded for sick pay payments for two weeks
- Small firms will be able to access “business interruption” loans of up to £1.2m
- Business rates in England will be abolished for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000
Other highlights include:
- The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500
- No other new announcements on income tax, national insurance or VAT
- Tax paid on the pensions of high earners, including doctors, to be recalculated
- Fuel duty to be frozen for the 10th consecutive year
- Business rate discounts for pubs to rise from £1,000 to £5,000 this year
- System of High Street business rates to be reviewed later this year
- Firms eligible for small business rates relief will receive £3,000 cash grant
- Entrepreneurs’ Relief will be retained, but lifetime allowance will be reduced from £10m to £1m
- £5bn to be spent on getting gigabit-capable broadband into the hardest-to-reach places
- An extra £900m for research into nuclear fusion, space and electric vehicles.
- VAT on digital publications, including newspapers, books and academic journals to be scrapped from December
- Plastic packaging tax to come into force from April 2022
- Manufacturers and importers whose products have less than 30% recyclable material will be charged £200 per tonne
- Subsidies for fuel used in off-road vehicles – known as red diesel – will be scrapped “for most sectors” in two years’ time, but red diesel subsidies will remain for farmers and rail operators
As ever, it is all in the detail! If you have any queries please contact Jackie or Andrew.