Rishi Sunak delivers Budget 2020

The Bank of England has announced an emergency cut in interest rates to shore up the economy amid the coronavirus outbreak.

As you can imagine following recent events this budget started with a strong focus on Covid-19 and what the government is doing so that the necessary resources are in place to ensure the health, safety and financial wellbeing of individuals.

Chancellor Rishi Sunak unveiled a £30bn package to help the economy get through the coronavirus outbreak. He warned of a significant but temporary disruption to the UK economy but vowed: “We will get through this together.”

Some of the headlines that have been introduced are;

The NHS will receive whatever funding they require be that millions or billions of pounds

Statutory Sick Pay (SSP) for all individuals that are off work with Covid-19 will start from Day 1 instead of Day 4 and sick notes can be received by calling 111 instead of going to a local GP

SSP is something that is paid by the employer, to reduce the financial hardship on Small Business with less than 250 employees any employee who is off due to Covid-19 the government will refund the employer any SSP paid from day 1 to day 14.

When it comes to pensions it was again relatively quiet however the changes that were made were expected and was introduced to help NHS and its staff. It has been well criticised by NHS consultants and due to their working patterns, they have been hit with additional tax charges since the introduction of Tapered Annual Allowance on 6th April 2016. As a result, the government are increasing the threshold income an individual must earn from £110,000 to £200,000 and the adjusted net income from £150,000 to £240,000 before their annual allowance is reduced on a sliding scale until they meet the minimum annual allowance of £10,000.

For those on the very highest incomes, the minimum level to which the annual allowance can taper down will reduce from £10,000 to £4,000 from April 2020. This reduction will only affect individuals with total income (including pension accrual) over £300,000. Proposals to offer greater pay in lieu of pensions for senior clinicians in the NHS pension scheme will not be taken forward
One change we knew was going to be confirmed was the increase of the Lifetime Allowance, the maximum amount someone can accrue in a registered pension scheme in a tax-efficient manner over their lifetime will increase in line with CPI for 2020-21, rising to £1,073,100.

Other items to come out of the budget include the following;

The minimum earning threshold before National Insurance is paid is increasing to £9,500 from £8,632

ISA limits are remaining at £20,000 however Junior ISA limit will increase from £4,368 to £9,000

Starting rate for savings tax band – The band of savings income that is subject to the 0% starting tax rate will remain at its current level of £5,000 for 2020-21

Corporation Tax is remaining at 19%

Fuel duty will be frozen for another year as well as all alcohol duties

A tax on plastic packaging manufacturers will be introduced from April 2022 on any plastic that is made with less than 30% recycled plastic

The planned rise in beer, cider and wine duties cancelled

£5bn for gigabit-capable broadband into the hardest to reach places of the UK

UK growth forecasts updated: 1.4% for 2020 and 1.6% for 2021

Government to abolish business rates for small shops this year

Entrepreneurs' Relief will be retained, but lifetime allowance will be reduced from £10m to £1m

An extra £900m for research into nuclear fusion, space and electric vehicles

High-risk research agency – The UK will invest at least £800 million in a new blue skies research agency.