Now that the budget has been and gone, we have a better idea of the government’s spending priorities for the year ahead. This year’s budget has been under the shadow of Coronavirus, so many of the announcements have been emergency measures to help the country deal with coronavirus – we’ll take a quick look at those, but we also wanted to explore the longer-term changes.
Protections for coronavirus
The unexpected element of this year’s budget, dealing with coronavirus means that the country needs some strong protections both for the NHS and for the businesses that will be affected by an economic slump.
On the first point, the Chancellor has announced what he’s calling ‘a blank cheque’ to help our health service deal with the added pressures. In practice, this id £5bn of additional funding to begin with, and the promise of more if it becomes necessary.
Meanwhile, several measures have been put in place to protect small businesses. Companies with fewer than 250 employees will have their sick pay paid by the treasury, and business rates have been cut dramatically. There will also be loans and grants made available to help businesses weather the storm. These changes are good news for those employed by smaller companies, as they should mean that you can get the support you need from your employer.
Finally, the budget made provisions for those who are unable to work due to coronavirus to claim statutory sick pay from the first day of absence, as opposed to the fourth as it is currently.
There have been a handful of tax changes to take note of this year:
- National insurance threshold increases to £9500 from April 2020. This means those earning over £9500 will pay £104 less in tax each year (£78 if you are self-employed).
- Capital Gains Tax changes for landlords. If you currently benefit from Lettings Relief, then make sure you read up on the changes, which mean that this kind of tax relief will now only apply if you have shared occupancy with the tenant. The Principal Private Resident Relief is also changing, being halved from 18 months to 9.
- Pensions tax rules have been relaxed for high earners, to address concerns that doctors were unable to take additional shifts without suddenly facing much larger tax bills.
Benefits, pensions and minimum wage
Many working-age benefits have been frozen for several years, but now there are going to be increases to several key benefits including Jobseeker’s Allowance, Employment and Support Allowance, Housing Benefit and Child Benefit. The increase will be 1.7%, which means that these benefits are going up in line with the cost of living.
The state pension is also going up by 3.9% – this applies whether you receive the older state pension (a jump from £124.35 to £129.20 ), or the newer one (£168.60 to £175.20). Finally, the minimum wage for over 25s has been given a much-needed hike, from £8.21 to £8.72 an hour.
Taken together, this makes for a nice package of financial benefits, and although there’s certainly nothing ground-breaking, it should leave many people feeling better off.