UK Chancellor Rishi Sunak has delivered his first Budget, announcing the government’s tax and spending plans for the year ahead.
The state of the economy was announced with the Budget, with the economy predicted to grow by 1.1% this year (not taking into account the coronavirus), revised down from 1.4% last year – this would be the slowest growth since 2009. Inflation is forecast at 1.4% this year
The Budget saw the announcement of multiple measures to respond to the Coronavirus outbreak;
- A £5bn fund will be made available to support the NHS and other public services
- Statutory sick pay will be paid to all those who are advised to self-isolate, whether they present symptoms or not
- Business rates will be abolished for retail, leisure and hospitality firms with a rateable value under £51,000
- Self-employed workers will be able to claim contributory Employment Support Allowance from day 1
- Firms with fewer than 250 staff will be refunded for sick pay payments for two weeks
- ‘Busines Interruption’ loans will be made available for small businesses.
Speaking in the House of Commons on Wednesday, Rishi Sunak said “Coronavirus will have a significant impact on our economy, but it will be temporary. I will do whatever it takes to get to our nation through it”
In key tax news, the Chancellor announced;
- The tax threshold for National Insurance Contributions will rise to £9,500, up from £8,632.
- The current 5% VAT on women’s sanitary products, also known as the tampon tax, is to be scrapped
- VAT on digital publications is also to be scrapped from December, while the System of High Street business rates will be reviewed later this year.
- Duties on fuel, spirits, beer, cider and wine are to be frozen, while tobacco taxes will continue to rise by 2% above the inflation rate
- Tax on plastic packaging is to begin from April 2022
Some key investments were also announced;
- £2.5bn will be made available to fix potholes over five years
- £37bn will be invested into motorways and other primary roads
- £650m will be made available to tackle homelessness
- £1bn will be made available to remove unsafe combustible cladding from certain buildings
- £5.2n will be invested into flood defences over the next five years
- £640m will be made available for the protection of natural habitats and planting of 30,000 new trees
- £5bn will be invested into broadband
- £900m extra will go into research into nuclear fusion, electric vehicles and space
Full details of the budget can be found on the Government website.