The Chancellor Rishi Sunak delivered his (and/or Boris’s) first budget today.
Under normal circumstances, the first budget after a big election win, we could expect a range of politically motivated tax changes. Not today. Times are uncertain, as we appear to be in the early stages of a potentially serious Corona Virus outbreak, which could significantly hit both demand and supply in the economy; with a potential reach of 20% of the labour force quoted today.
I wonder if the timing of the budget may be helpful for us, allowing the Chancellor to implement the Corona Virus measures early into the outbreak, and allowing us more time to plan the impact on our own businesses and possibly the virus itself (if more people self-isolate).
I think we can ignore the economic growth forecasts (1.8% in 2020) and inflation forecasts (1.1% in 2020) as they didn’t include any impact of the Corona Virus.
As usual, there was much talk of extra money for This, That and The Other and New Funds to help X, Y and Z. I’ll pass on commenting on these as I tend to find getting to the bottom of what is “new money” and what is “real” near to impossible.
I think it’s well worth us all taking time to consider our own Corona Virus measures for our businesses and planning for disruption in both supply and demand, whilst doing what we can to stem the spread of the virus.
Corona Virus – temporary measures announced
- SSP (Statutory Sick Pay) – paid from day 1 (not day 4) and available to all who have been advised to self-isolate.
- SSP paid by the Government in full for 14 days for companies with less than 250 employees.
- Business rates for firms in England with a rateable value below £51,000 suspended for a year.
- £3,000 cash grant for small businesses who are eligible for small business rates relief.
- Extension of HMRC’s Time To Pay arrangements for paying taxes – for companies with cash flow problems.
- National Insurance Employers Allowance – increased from £3,000 to £4,000 per annum.
Tax – not much change
- Income Tax and Income Tax allowance (£12,500) and higher rate threshold (£50,000) are all unchanged for 2020/20 tax year.
- National Insurance threshold increases from £8,632 to £9,500 per annum (for employees and the self-employed).
- Corporation Tax remains at 19%.
- Entrepreneurs relief – lifetime limit reduces from £10m to £1m.
- Freezing of duties on beer, cider, spirits and fuel for the year.
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