• Budget 2020 Update


  • Summary of Budget 2020:  The Key points 

    The Chancellor 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.

    Coronavirus response

    • £5bn emergency response fund to support the NHS and other public services
    • 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
    • The ESA benefit will be available from day one, not after a week as now
    • £500m hardship fund for councils 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
    • Sunak unveils £30bn package to combat coronavirus
    • Business rates scrapped for shops and cafes

    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 doctors, to be recalculated

    Alcohol, tobacco and fuel

    • Fuel duty to be frozen for the 10th consecutive year
    • Duties on spirits, beer, cider and wine to be frozen
    • Tobacco taxes will continue to rise by 2% above the rate of retail price inflation
    • This will add 27 pence to a pack of 20 cigarettes and 14 pence to a packet of cigars
    • Business rate discounts for pubs to rise from £1,000 to £5,000 this year

    Business, digital and science

    • System of High Street business rates to be reviewed later this year
    • Firms eligible for small business rates relief will get £3,000 cash grant
    • Entrepreneurs’ Relief will be retained, but lifetime allowance will be reduced from £10m to £1m
    • £5bn to be spent on getting gigabit-capable broadband into the hardest-to-reach places
    • Science Institute in Weybridge, Surrey to get a £1.4bn funding boost
    • An extra £900m for research into nuclear fusion, space and electric vehicles
    • VAT on digital publications, including newspapers, e-books and academic journals to be scrapped from December
    • VAT scrapped on eBooks and digital newspapers

    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
    • Subsidies for fuel used in off-road vehicles – known as red diesel – will be scrapped “for most sectors” in two years’ time
    • Red diesel subsidies will remain for farmers and rail operators
    • £120m in emergency relief for communities affected by this winter’s flooding and £200m for flood resilience
    • Total investment in flood defences to be doubled to £5.2bn over next five years
    • £640m “nature for climate fund” to protect natural habitats, including 30,000 hectares of new trees

    Transport, infrastructure and housing

    • More than £600bn is set to be spent on roads, rail, broadband and housing by the middle of 2025
    • There will be £27bn for motorways and other key roads, including new tunnel for the A303 near Stonehenge
    • £2.5bn will be made available to fix potholes and resurface roads over five years
    • Further education colleges will get £1.5bn to upgrade their buildings
    • £650m package to tackle homelessness, providing an extra 6,000 places for rough sleepers
    • Stamp duty surcharge for foreign buyers of UK properties to be levied at 2% from April 2021
    • New £1bn fund to remove all unsafe combustible cladding from all public and private housing higher than 18 metres

    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
    • UK growth ‘to be slowest since 2009’
    • Borrowing surge to fund ‘significant’ spending plans
    • The chancellor’s very large cheque book

    Nations and Regions

    • An extra £640m for Scotland, £360m for Wales, and £210m for Northern Ireland.
    • Treasury’s Green Book rules to be reviewed to factor regional prosperity into spending decisions
    • Treasury to open new offices in Wales and Scotland
    • New civil service hub in the North of England, employing 750 staff
    • New devolution deal for West Yorkshire, with elected mayor for region
    • Universities outside the south east of England to get lion’s share of extra £400m R&D funding
    • £800m for two carbon capture and storage clusters, creating 6,000 new jobs in Teesside, Humberside, Merseyside and Scotland

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