Budget 2020: In a barnstorming “performance”, the new Chancellor Rishi Sunak delivered his first budget with a chorus of “This budget gets it done”.
It was heavy on help for people & businesses through a potentially tricky period, and beer, wine, and spirits duties were frozen, but what else? And why should overseas buyers act quickly?
As expected the budget 2020 was totally overshadowed by the Coronavirus and a whole package of measures designed to help businesses cope with the effects, which let’s be frank, may not be pretty as the Government expects around a fifth of people off work short-term.
With a response designed to be “timely, temporary and targeted” we saw, amongst other things,
- Statutory Sick pay from day 1 for people who need to “self-isolate” and firms with fewer than 250 employees able to get these refunded up to 14 days
- Small firms will be able to apply for “Business Interruption” loans up to a level of £1.2m
- Business rates with a ratable level below £51,000 abolished if you are in the hospitality, retail and leisure industries
Apart from this, there was a sweeping statement that the NHS would get “whatever it needs” to help cope if things get more difficult.
After all the pre-match hype around housing, in the end, Budget 2020 didn’t provide much to write home about at all.
There was the usual promise that they would actually build some decent homes, though we have heard that before, there were really four main items of interest.
- There was no stamp duty cut for anyone, but the expected surcharge for foreign buyers did happen. Interestingly this was at 2%, (rather than the expected 3%) and more importantly, it has been slated for April 2021. This, of course, means that we should expect an uptick in activity from overseas buyers up to that point. I expect this will prove to be a busy time for those from overseas who wish to take the opportunity to invest in the still very-much stable, UK property market.
- There is a new £1 billion fund to help remove unsafe cladding from private and public buildings higher than 18 meters. This may well prove to be a drop in the ocean but is welcome all the same.
- There is an extension to the affordable housing program with a new £12bn settlement.
- A £650m fund to help tackle rough sleeping.
Taxes & Business
The big cheer, and the big gag, came when the Chancellor revealed that the “Book Tax” has been scrapped, so no VAT on digital publications including newspapers and e-books, as well as the freezing of duties on beer, wine, and spirits. Maybe everyone being drunk is the way to get through the next few weeks!
Entrepreneurs’ relief has not been scrapped as some thought it would be, but the lifetime allowance has been reduced from £10m to just £1m.
The “Tampon Tax” has also been abolished and the National Insurance Contribution threshold is up from £8,632 to £9,500.
Devil in the Detail
Of course, there was plenty more than that, as well as a whole range of environmental measures which many will think did not go even remotely far enough and loads more on infrastructure.
As ever, the devil is really in the detail and many will be pouring over the fine print over the coming days to see what else was buried away in there and also answer the question, how are we going to pay for all this.
After years of austerity, this is a major turnaround, but many will be glad they have, for the time being at least, found that magic money tree in the depths of the garden at No 11.
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