Budget 2020: What Did The New Chancellor Announce?
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Posted by Roger Eddowes on 12/03/2020 @ 8:00AM
We've had a new Prime Minister and a General Election. We're well into the Brexit transition period for the rest of the year, and we now have Budget 2020. Was it worth the wait?
Budget 2020 announced a considerable increase in public spending and a thorough shoring up of the economy!
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Delivered to the sound of cheers from the Government benches (and long faces for the opposition), Chancellor Rishi Sunak delivered on the election promises of the Conservative Party and most definitely turned on the taps with some big commitments for the whole country.
"The Budget was in two parts!"
Of course, the Coronavirus outbreak needed a Treasury response. There was extra funding for our beloved NHS with the Chancellor stating that "whatever is needed" would be made available, be that extra funding, personnel or other medical resources.
Statutory sick pay will be funded for small and medium-sized enterprises and a number of cash handouts and the suspension of some business rates will bring some real cheer to business owners dealing with a downturn in customers due to the outbreak.
The Government really doesn't want to deal with a recession so the Chancellor made sure his announcements went hand in hand with this morning's interest rate cut from the Bank of England. Monetary and fiscal policy are totally aligned in the UK right now.
"What does the Budget mean for business?"
There is no doubt that "this Government gets things done" as Rishi proclaimed the phrase after every big reveal. According to the Treasury's red book, the numbers don't quite add up, so I'm sure there'll be a few surprises once analysts and economists dissect the Budget in fine detail. The lack of EU contributions from 1st January 2021 has been used to shore up spending.
A key point for any business is that the proposed corporation tax cut from 19% to 17% has been put on hold and the Entrepreneurs' Relief limit has been reduced to £1m. The duty relief on Red Diesel has been slashed for many sectors and further investment will be made into HMRC to improve on tax compliance.
The off-payroll working (IR35) rule changes will still come into effect in April, business rates will be reviewed and the Structures and Building Allowance increases from 2% to 3%. NIC thresholds increase to benefit workers and the pensions annual allowance thresholds which will mainly help high-paying consultants in the NHS. The Government have pledged a thorough review of Making Tax Digital for VAT before rolling it out to other taxes.
Chancellor Rishi Sunak struck a very positive tone throughout his Budget announcement, despite the threat of Coronavirus to the economy. The thing he made perfectly clear was the pandemic would only be short-term and that he can make some tweaks and changes in the next Budget announcement, scheduled for later this year.
"I thought it was a very inspiring performance by the young Chancellor today and will be good for business in the UK!"
Yes, the numbers in the Red Book are a bit unqualified right now, but the net effect of Budget 2020 is a considerable increase in public spending with a thorough shoring up of the economy to weather the challenges of the next few months.
Until next time ...
Would you like to know more?
If you'd like to talk to me about how you or your business may be affected by Budget 2020, call me on 01908 774320, leave a comment below or click here to ping over an email and let's see how I can help you.
About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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