Budget 2020: What you need to know

As the Bank of England announced a reduction of interest rates from 0.75% to 0.25% in response to the impact of coronavirus on the economy, the Chancellor announced measures to support people and businesses affected by coronavirus.

The measures include statutory sick pay from day one for those who need to take time off work through sickness or to self-isolate, as well as a hardship fund of £500m for local authorities to make grants to economically vulnerable people.

The announcement includes provision for statutory sick pay of up to 14 days for organisations with fewer than 250 employees, including those who self-isolate and people caring for them. Charities that are employers will benefit from this support.

Here are some of the other highlights from the budget statement that might be of interest:

  • A temporary coronavirus business interruption loan scheme, initially worth up to £1bn. It will guarantee 80% of the value of relevant loans worth up to £1.2m to give lenders further confidence in lending to small and medium-sized enterprises (which may in practice include some social enterprises). More details will hopefully emerge in the coming days
  • Increases to the National Minimum Wage so that it will be two thirds of median earnings by 2024 or approximately £10.50 per hour
  • The national insurance threshold will increase to £9,500 by April 2020, which would save a typical employee over £450 per year
  • Employment allowance will be increased from £3,000 to £4,000, saving money for charities who pay more than £3,000 in employer national insurance contributions
  • £12.2bn for the Affordable Homes Programme
  • £90m per year for arts education in secondary schools
  • £29m a year by 2023-24 to support primary school PE teaching and help schools make best use of their sports facilities
  • An increase in the Immigration Health Surcharge to £624, with a discounted rate of £470 for children
  • £2.5m for research and developing best practice around the integration of services for families, including family hubs, and how best to support vulnerable children
  • Investment in domestic abuse services including a £5m trial of domestic abuse courts in England and Wales
  • A service improvement that will make Tax Free Childcare (TFC) compatible with school payment agents, allowing parents of up to 500,000 school-aged children across the UK to access TFC and use it towards the cost of their wraparound childcare
  • Confirmation that the UK Shared Prosperity Fund will at a minimum match current levels of funding for each nation from EU structural funds. The government will set out further plans for the Fund at the Comprehensive Spending Review in autumn
  • Exemptions from the Shared Accommodation Rate for claimants of Universal Credit and Housing Benefit covering rough sleepers aged 16-24, care leavers up to the age of 25, and victims of domestic abuse and human trafficking
  • There will be £6bn of further funding for the NHS in England and £1bn for social care over the next year
  • There will also be a £5bn emergency response fund for the NHS, with the chancellor adding that the government stands ready to provide any support needed in the event of an emergency.
  • The ‘tampon tax’ will be abolished, marking the success of a 20-year campaign by women’s rights activists. The 5% VAT currently added to tampons and other women’s menstrual products will be scrapped when Britain leaves the EU at the end of the year
  • The government has committed £1bn in funding for a range of green transport solutions, including electric vehicle use. There will also be £640m for tree planting, an increase in the climate change levy on gas, and a new plastic packaging tax from April 2022. A nature recovery network fund will also be established, partnering with local communities to protect wildlife
  • Changing Places fund will provide £30m to Changing Places, a consortium including charities, to build fully accessible toilets with enough space and equipment to meet disabled people’s needs
  • There will be a review of the business rates system
  • The government will provide a £10m to deliver charitable projects and initiatives that support veterans with mental health needs.

For more details the Treasury website has an executive summary along with the full statement. You can view it here

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