2020 Budget – What Can Business Owners Expect?
The country is almost holding its breath ahead of the 2020 budget which, after some speculation, seems set to go ahead. The newly appointed chancellor, Rishi Sunak, will deliver the financial statement on 11th March.
This is a time of significant turmoil for the UK amid the Brexit transition period. In addition new trade deals are still being negotiated outside of Europe that could have far reaching consequences.
It would be reasonable to conclude that whatever the outcome of the 2020 budget financial statement our future remains fluid at this time. So, with this in mind and in consideration that budgets commonly remain a source of surprise, we look at what we know so far, and what are the likely key areas that could impact on your personal and business lives.
Tax seems a good place to start. The Conservatives election manifesto set out plans to increase the threshold for paying National Insurance, aiming to provide some financial relief for around 30 million workers. It is believed that this will be expanded upon and confirmed within the budget.
The chancellor is also expected to target the capital gains tax break, entrepreneur’s relief. A scheme reducing Capital Gains Tax of lifetime gains when selling a company. The scheme was originally introduced in 2008 with the aim of encouraging businesses to establish and grow. This is something of a blow for UK businesses who have called on the Government to reconsider this proposal commenting that ‘it would remove major incentives for people to set up their own ventures.’. It has been hypothesised that the tax relief system would be scrapped in a bid to increase public spending.
Lastly predictions have been made with regard an increase in tax and potentially council tax to provide revenue for the social care system which has been in crisis for some time. The government has been expected to issue a green paper on reform of the system over the past 2 years however the paper has not been forthcoming. Social care was mentioned in the Queens’s speech which commented that the Government was committed to addressing the financial shortfalls.
Business rates are also expected to come under the spotlight and the business sector has demonstrated a strong voice nationally on this topic, calling for significant reform. At present, and following details published by the government in January, an increase in relief is expected resulting in a 50% discount for the retail sector. The full statement issued by the government in January can be viewed here.
It is likely and appropriate that the environment features in the budget with the Government being committed to reaching net-zero carbon emissions by the year 2050. Several plans to achieve this goal have been proposed including an increased spend on measures to improve the energy efficiency of homes and businesses. Proposals to increase renewable energy sources have also been discussed.
The Final Word on the 2020 Budget
There are several other areas that seem to be favoured for inclusion in the financial statement including housing, aiding first time buyers with the Right to Buy scheme ending in 2023, investment in the Midlands and North East to tackle the economic inequality, improving workers’ rights, specifically those employed on zero-hours contracts and a procedure for supporting public health concerns in light of the coronavirus crisis.
For now that is as much as we can say. The general feeling is that the 2020 budget will seek to increase public spending and boost the economy and it is expected that proposals will be radical. In next week’s post we will review the budget, and what it means for you in reality. In the meantime please take a moment to browse our blog for other articles of interest.