What is The Budget?
The Budget is a set of financial announcements about how public services will be funded and how business/people will be taxed, in a nutshell.
Why so much fuss about the Budget 2020?
The March 2020 Budget is significant for a number of reasons, there were always going to be 2 big reasons but then the world shouted “Hold my beer” and added Corona Virus (CoVid-19) into mix.
This was going to be a significant budget because it was unbelievably the first Budget since October 2018 when Philip Hammond changed the previous structure from an annual Budget and Autumn Statement to a single Budget per year. The 2019 Budget was postponed, for reasons I will come on to, so all in all the best part of 17 months between Budgets which is unheard of. The gap between the last Budget and the 2020 Budget means that previous Chancellor Savid Javed was the first Chancellor since 1970 to NOT conduct a Budget speech.
Right, so the other significant factor in the mix was that this March 2020 Budget was going to the be The Brexit Budget…. more on that later… The October Budget 2019 was postponed due the the never ending saga of Brexit and Remain V Leave brigade constantly arguing. How could Savid Javed set a Budget when he didn’t know what the Brexit, EU and Ecomic future looked like… So he didn’t, poor chap never got to set a Budget.
Then, the third significant factor contributing to why this Budget was important, yep, we had Corona, or now refered to as COVID-19, on the shores! So, the new Chancellor not only needed to shore up the economy, thank all the Tory voter for the General Election 2019 vote, but now he needed to act on shoring up the economy against Corona.
No problem, a seasoned politician can deal with this! Right?
Well luckily for us, the new Chancellor was Rishi Sunak and he’d got bags of experience in the job! All 4 weeks of it!
Talk about Baptism of Fire.
It’s all too much, I need a drink!
Let’s briefly lighten the mood! Did you know that MP’s cannot drink in the House of Commons Chamber except for one person, on one day? Yeah, they’re all teetotal in the Chamber except for the Chancellor. On Budget day the Chancellor is allowed to take a tipple to the dispatch box. Surprisingly though, not one of them has taken the opportunity to have a drink since Kenneth Clarke way back in 1996, the Tories lost the next election, well they got battered i the next election and no Chancellor has since had a tipple.
FYI – Ken had a drink of whiskey (It might be a pub quiz question)
The Long Goodbye
There’s a lot of information to go through, the whole the UK’s financial arrangements, so how long should you expect a budget to last? Well, luckily for us they tend to be around the 60 minutes mark with Rishi coming in at 65 minutes.
The longest ever, continual Budget speech was thankfully back in 1853 and lasted a mammoth 4 hours and 45 minutes!
The whole business rates system is under review!
Business rates in England will be abolished for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000
The threshold for National Insurance contributions will increase from £8,632 to £9,500, a move that will save people up to £104 a year, with the average saving sitting at £85 per year. If you are self employed then your saving will look more like £78 a year.
There were rumours this might be scrapped, but it stays!
However, the lifetime allowance for ER has been reduced from £10m to £1m.
It was planned for Corporation Tax to reduce to 17% from April 2020, however that reduction has been scrapped so for 2020/21 Corporation Tax will be 19%
Booze, Ciggies and Fuel
Duty has been frozen on alcohol again
Fuel duty is also frozen, for the 10th year in a row!
Cigarette duty is to increase by 2% above inflation
Corona Business Support
£3,000 cash grant for businesses effected by Corona with a rateable vlaue under £15k
Government back loans for SME’s with turnover under £1.2m
Government funded SSP (Statutory Sick Pay) for employees choosing to Self Isolate from day 1 for 2 weeks, removing the previous waiting period.
Time To Pay HMRC scheme to be increased.