Rishi Sunak’s first budget: what you need to know
Just a few weeks into the job and Chancellor Rishi Sunak has had to deliver a budget at a time of a global health crisis. The possible implications of coronavirus caused stock markets to tumble at the start of the week and this morning, the Bank of England announced an emergency interest rate cut to shore up the economy. Challenging times indeed, not just for the politicians but for anyone making financial plans but it’s important to maintain a sense of perspective and keep longer-term plans on track.
Despite the special coronavirus measures, much of what the Chancellor announced in his speech today was already settled back in the autumn when a budget would have been delivered were it not for another ‘unplanned’ event – the general election. If you’re determined to keep your business and investment plans on track, here are the key things from the speech you need to know.
Businesses employing less than 250 employees will get the cost of 14 days’ statutory sick pay relating to the virus fully refunded by the Government.
There is to be a new, temporary business interruption loan scheme to support small businesses.
HMRC’s Time to Pay department will be strengthened to support businesses needing to defer their corporation tax payments.
To be abolished for those businesses with a rateable value of less than £51k operating in the retail, hospitality and leisure sectors.
The system of business rates is to be reviewed.
Businesses eligible for small business rate relief will benefit from a cash injection of £3000.
Those in receipt of Employment Support Allowance benefit to be able to claim sick pay from day 1 rather than day 4. Sick pay to be available to all those advised to self-isolate – even if symptom- free. It will also be made easier for the self-employed to access benefits.
Tax and national insurance
As anticipated the threshold for paying NIC will be increased to £9,500.
Corporation tax remains at 19 per cent.
Despite predictions that the scheme may be scrapped, the Chancellor has maintained the relief but reduced the lifetime allowance from £10m to £1m.
2% surcharge on stamp duty for overseas buyers from April 2021.
Frozen on spirits, beers, cider and wine. Fuel duty remains frozen for one more year.
Infrastructure and housing
Funding of £600bn is to be spent on infrastructure over the next five years, including road, rail and housing. A special fund of £2.5bn has been allocated for potholes and resurfacing.
Affordable and safe housing is said to be a priority. There is to be a £1bn building safety fund to remove unsafe cladding from buildings greater than 18m tall. Interest rates are to be reduced by one per cent for lending for social housing. A sum of £1.1bn has been set aside in the Housing Infrastructure Fund for the construction of 70,000 new homes in areas where demand is highest.
There’s a lot of spending pledges in the budget, but not much that specifically relates to the private rental sector. Other measures include spending on flood defences, taxation on plastic packaging, and support for rural broadband. Over the next few days, analysts will be delving into the numbers, but right now, the view from the press is that this budget is bold and brave.