What’s In The Chancellor’s Budget For 2020?

The Chancellor of the Exchequer Rishi Sunak has laid out the government’s plans for the year in his 2020 budget.

It has been hailed as ‘the largest sustained financial boost for nearly 30 years’, but what has been promised?

Tampon Tax Eliminated 

• Women’s sanitary products will be zero-rated for VAT once Britain leaves the EU in January 2021. The government estimates that the tax cut will lead to typical savings of 7p on a pack of 20 tampons and 5p on a pack of 12 pads, which could save the average woman an estimated £40 over her lifetime.

Coronavirus Measures

• Sunak has put forward measures intended to mitigate the effects of the Coronavirus outbreak:
  • Statutory Sick Pay will be paid to workers who self-isolate, even if they don’t display symptoms. They’ll need to obtain a sick note from 111 rather than from a GP. 
  • A “temporary coronavirus business interruption loan scheme” will be set up for banks to offer loans of up to £1.2m to support small and medium-sized businesses.
  • The government will meet costs for businesses with fewer than 250 employees of providing statutory sick pay to those off work because of coronavirus

Taxes and Duties

• A planned increase in duty on beers and spirits has been scrapped, with taxes on other alcoholic drinks being frozen. This move was praised by British Beer and Pub Association, who said it would save pub-goers £80m and safeguard 2,000 jobs. Charities fighting alcohol abuse have criticised the move, saying that the government has placed industry profits over health.
• Companies with a rateable value of less than £51,000 will be eligible for a tax holiday (meaning they won’t pay business rates in 2020). This measure will apply to cinemas, shops and restaurants, and is being unveiled to support businesses in the face of disruption from the Coronavirus. Mr. Sunak says the tax cut will save businesses up to £25,000. 
• A 20% tax on e-books and online newspapers and magazines will be abolished on 1st December. This follows 600 authors petitioning Parliament to scrap the tax back in October. The Publishers’ Associations welcomed this move and responded on their Twitter account:

In 2018, the Publishers’ Association estimated that universities, libraries, government departments and the NHS could save up to £55 million a year if the tax was ditched. 

Investments

• £27 billion investment in roads.
• £510 million for a ‘shared rural mobile phone network’.
• £120 million will be made available to areas affected by the recent floodings, whilst the flood defences will see a doubling in funding to £5.2 billion over the next six years.
• There’ll be a additional £640 million for the Scottish government, £360 million for the Welsh government (Welsh Finance Minister Rebecca Evans said the money “barely takes us back to where we were 10 years ago”) and £210 million for the Northern Ireland Executive.
• The government will double its spending on research by 2024, a move welcomed by chief scientific adviser Patrick Vallance who said, “This significant increase in funding for research and development represents an overwhelming endorsement of our world-leading science base.”