On Wednesday, we saw the new Chancellor, Rishi Sunak, deliver his first budget and also the first budget of the decade. As expected, the primary focus was the Coronavirus (COVID-19). It was advised that the government will be introducing a total of £30bn extra spending to help reduce the economic impact that the pandemic will have.
We have reviewed the budget overall and have summarised the key points which could affect you and your business, including a change to the national insurance threshold.
- Due to COVID-19, anybody who has to self-isolate will be entitled to statutory sick pay, this will be payable from the first day of illness, as opposed to the fourth. As a temporary measure, it has been promised that businesses with fewer than 250 staff will be entitled to claim a refund for SSP for two weeks for any employees affected.
- In addition to this, all retail, leisure and hospitality businesses with a rateable value of less than £51,000 will be exempt from paying business rates over the next financial year.
- It was previously proposed that there would be a reduction in the corporation tax rate to 17% as of April 2020, however this will not go ahead and the corporation tax rate will remain at 19% for the next two financial years.
- The national insurance threshold will rise from £8,632 to £9,500, those who earn more than £9,500 will on average benefit by £85 a year.
- There will be an increase in the Employment Allowance from £3,000 to £4,000 from 6th April 2020.
- After the initial fear of Entrepreneurs’ Relief being fully stopped, it has been confirmed this will be retained, but lifetime allowance will be reduced from £10m to £1m.
- VAT on digital publications, including newspapers, e-books and academic journals will be zero-rated from 1st December 2020.
- As of 1st April 2020, the rate of Research & Development Expenditure Credit is to be raised from 12% to 13%.
- There was no change announced to the off-payroll rules for the private sector (IR35).
To read further information on the Budget, please visit https://www.gov.uk/government/publications/budget-2020-documents/budget-2020.
For further advice for employers and employees on Coronavirus, please visit https://www.acas.org.uk/coronavirus.