Spring Budget 2020 – Summary

We have waited a long time for this budget, and it was full of surprises – both for what it did and did not include. And unlike many recent budgets there were not loads of hidden items in the accompanying red book – just more details on budget and previous announcements.

Surprise changes

Entrepreneurs relief was not abolished but capped at £1m, just what we wanted. Apparently, this will primarily affect the top 15 “entrepreneurs”.
VAT on digital publications reduced to zero from 1st December 2020, in line with HMRC loosing a court case brought by The Times

Use of home allowance up from £4 per week to £6 per week

The Big Rates Giveaway

For one year only – Budget Business rates Reliefs – don’t forget to claim them.

Small Business retail relief, for shops and restaurants in England, with a rateable value of less than £51,000, is to be increased to 100% for one year i.e. nil to pay.
This relief is to be extended to leisure & hospitality premises for one year – e.g. small hotels, art galleries, caravan parks, museums, sports clubs, gyms, cinemas, night clubs, guest houses, B&B

The rates relief for Pubs with a rateable value of under £100,000 is to be increased from £1,000 to £5,000 for one year
And for small business who already qualify for 100% business rates relief – a £3,000 cash grant

Coronavirus Covid-19 Sick Pay

Off sick or self-isolating? What the Government is offering.

NHS 111 service to issue sick notes for those recommended to self-isolate

Employees eligible for Statutory sick pay should be paid from day 1 instead of day 4
Self-employed & Low earners can claim for Universal Credit or Contributory Employment and Support Allowance
Minimum income floor or level of self-employed earnings required to qualify for Universal credit’s sick pay, is to be removed.
Sick pay is payable from day 1 not day 8 for Employment and Support Allowance
Advances of Universal credit without a job centre interview, if self-isolating

Hardship fund for local authorities to support economically vulnerable people & households.

Employers will be eligible to reclaim statutory sick pay paid due to Covid-19.

If they have less than 250 employees on 28/2/20
for up to 2 weeks per employee
for Covid-19 sickness or self-isolation (even if not sick)

from date regulations come into force.

Employment allowance is increased to £4,000

HMRC has also extended time to pay facilities for payment of taxes.

The banks have been primed to offer business loans with 80% government guarantees, as well as mortgage holidays and an interest rate cut.

Tax Rates and Thresholds

There are very few changes here: –

National Insurance starting threshold raised to £9,500 for employees
New benefit in kind rates for company cars, and cars registered after 5th April 2020
IR35 off payroll working – no new announcements or detail – still in limbo between the government saying it will be coming in and actually being law.

Buildings & Structures allowance up from 2% to 3%
R&D tax credits increased from 12% to 13%
Fuel duty frozen
No alcohol duty increases
Corporation tax planned reduction cancelled – to stay at 19%

VAT on women’s sanitary products reduced to zero
Vat registration threshold still at £85,000
Taper rule changes for high earner pension contributions
New 2% stamp duty surcharge for non-resident purchasers of properties in England & Northern Ireland from 1st April 2021 – to fund homes for rough sleepers
Red diesel reliefs being restricted to agriculture, domestic fuel and fishing from April 2022

New plastic packaging tax from April 2022

Funding & Projects

The government have announced major plans for spending including the following: –

R&D to help whiskey distilleries go green
Start–up loans & Blue Sky funding

Trade envoys
Technical investment, R&D funding for Space, Electric Vehicles, cleaner transport etc
Flood repairs, resilience and new defences
Trees & Carbon storage
Giga and 4G