The Chancellors First Budget and Your Business
In last week’s blog post we made predictions on the likely content and outcome of the chancellors first budget. Now several days after the event we look at the actual outcome and what it will mean for you and your business. You can read the budget in full via the UK Government website here.
We start with the hottest topic of the year, the Coronavirus. The government has committed a £5bn response fund to support the emergency services and NHS. In addition concessions have been made for anyone advised to self-isolate.
With regard to support for businesses, organisations with less than 250 staff will be refunded for sick pay relevant to Coronavirus for up to 2 weeks per member of staff. Businesses will also be able to access ‘business interruption’ loans where applicable.
Other financial commitments have been made to the NHS in general for recruitment and facility upgrades to the tune of £6bn.
The Budget has revealed the abolition of business dates within the retail, leisure and hospitality sectors for businesses with a rateable value of less than £51,000. High Street business rates will be reviewed at a later date.
As predicted the threshold for National Insurance Contributions has been increased to £9,500 potentially affecting half a million employees for the better.
It was also predicted ahead of the budget that the chancellor would target the Capital Gains Tax break entrepreneurs’ relief. The tax break has been retained however, the chancellor announced a 90% cut reducing the lifetime allowance from £10m to £1m.
Finally there is to be a recalculation of the tax paid on pensions for high earners.
Fuel and Consumables
Duty on fuel and alcohol is to be frozen although taxes placed upon tobacco will continue to increase at a rate mirroring the rate of inflation.
For those organisations eligible for small business rates a cash grant will be made available of £3,000.
Environment and Technological Advancements
The additional sum of £900m is to be made available for research into nuclear fusion, space travel and the development of electric vehicles.
A tax on plastic packaging is to be introduced but not until 2022, and charges will be levied against manufacturers and importers failing to utilise products with 30% or greater recyclable materials.
Funding to provide emergency relief for communities affected by winter flooding and new flood defences has been pledged in the region of £5.5bn.
And lastly £640m has been set aside to support the protection of natural habitats as a ‘nature for climate fund’.
Other areas benefitting are road and rail infrastructure, both in terms of creation and maintenance. The establishment of new housing and repair of existing public and private housing has been included, with a specific mention of the removal of all unsafe, combustible cladding. A fund has also been allocated to attempt to address homelessness by providing 6,000 additional locations for rough sleepers.
The Final Word
It is clear that the challenges facing the current Government are extremely difficult. The chancellors first budget is not all that we would hope for and is lacking in some areas, particularly the environment. However, with Coronavirus taking centre stage for the entire planet, perhaps this years budget statement is a fair starting point.
In order to deliver on the Budget Speech the Government will be borrowing £14.6bn more this year than previously forecast, equivalent to 2.1% of GDP, with a total additional borrowing of £96.6bn forecast by 2023-2024. UK growth is set to be the slowest since 2009. For now we watch the story unfold with bated breath.
We would like to finish by conveying our best wishes to all of our readers at this difficult time and wishing you all good health. If you have any queries on the content of this or any of our other blogs please do not hesitate to get in touch.