Budget 2020
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.
Here is a summary of the main points.
Personal taxation, wages and pensions
- The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500
- The move, first announced in November, will take 500,000 employees out of the tax altogether
- Those earning more than £9,500 will be, on average, £85 a year better off
- 5% VAT on women’s sanitary products, known as the tampon tax, to be scrapped
- No other new announcements on income tax, national insurance or VAT
- Tax paid on the pensions of high earners, including NHS consultants, to be recalculated to address staffing issues
Coronavirus and public services
- £5bn emergency response fund to support the NHS and other public services in England
- All those advised to self-isolate will be entitled to statutory sick pay, even if they have not presented with symptoms
- Self-employed workers who are not eligible will be able to claim contributory Employment Support Allowance
- £500m hardship fund for councils in England 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
The state of the economy and public finances
- Economy 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 coronavirus, would be the slowest growth since 2009
- Growth predicted to rebound to 1.8% in 2021-22, 1.5% in 2022-23 and 1.3% in 2023-24
- Inflation forecast of 1.4% this year, increasing to 1.8% in 2021-2022
- Government to borrow £14.6bn more this year than previously forecast, equivalent to 2.1% of GDP
- Total additional borrowing of £96.6bn forecast by 2023-2024 to pay for spending commitments
- Debt as a percentage of GDP forecast to be lower at end of current Parliament than now
Environment and energy
- 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
- £120m in emergency relief for English communities affected by this winter’s flooding and £200m for flood resilience
- Total investment in flood defences in England to be doubled to £5.2bn over next five years