With Coronavirus (COVID-19) taking up almost all media activity recently, it would have been very easy to have missed the Chancellors first Budget to parliament yesterday.
In his first Budget, Chancellor Rishi Sunak unveiled a £12bn package to help the country through the coronavirus outbreak.
- £5bn emergency response fund to support the NHS and other public services in England
- All those advised to self-isolate will be entitled to statutory sick pay, even if they have not presented with symptoms
- Self-employed workers who are not eligible will be able to claim contributory Employment Support Allowance
- The ESA benefit will be available from day one, not after a week as now
- £500m hardship fund for councils in England to help the most vulnerable in their areas
- Firms with fewer than 250 staff will be refunded for sick pay payments for two weeks
- Small firms will be able to access “business interruption” loans of up to £1.2m
- Business rates in England will be abolished for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000
- £6bn in extra NHS funding over five years to pay for staff recruitment and start of hospital upgrades
The Chancellor also outlined spending pledges that will add up to £18bn next year when combined with measures from last year’s Spending Review.
Emphasis has also been on building and infrastructure across the country.
The largest ever investment in English strategic roads, with over £27 billion between 2020 and 2025, enough funding to fill in around 50 million potholes across the country, and unprecedented investment in urban transport, with £4.2 billion for five-year, integrated transport settlements for eight city regions on top of £1 billion allocated to shovel-ready transport schemes.
Record funding of £5.2 billion for flood defences between 2021 and 2027, offering better protection from flooding for 336,000 homes and non-residential properties. Additional funding of £200 million will help communities most at risk of flooding recover faster in cases where they are affected by flood damage.
National Minimum Wage
Alongside the Budget, the government is formally announcing a new, ambitious target for the National Living Wage (NLW) to reach two-thirds of median earnings and be extended to workers aged 21 and over by 2024, provided economic conditions allow. Based on the latest OBR forecast, this means the NLW is expected to be over £10.50 in 2024.
This builds on the 6.2% increase of the NLW to £8.72 an hour that takes effect from this April, meaning the government is on track to meet its current target of 60% of median earnings by 2020.
Investment in the NHS
The NHS is the government’s number one spending priority. The NHS settlement, confirmed in January 2019, provided the largest cash increase in public services since the Second World War – an additional £34 billion per year by 2023-24.25 Spending Round 2019 confirmed the government’s commitment to the NHS, with £139 billion for health budgets in 2020‑21.26 The Budget provides over £6 billion of further funding to strengthen the NHS in England and pay for vital services that will improve people’s health, reaffirming the government’s commitment to health and social care.
The government will invest to increase staffing, making sure that the NHS has the people it needs. This will include a significant funding package to improve the recruitment, training and retention of nurses in England, ensuring there are 50,000 more in the NHS; and for the recruitment, training and retention of up to 6,000 more GPs and 6,000 more primary care professionals in England, such as physiotherapists and pharmacists. This will create 50 million more GP surgery appointments a year. The government will also change pensions tax rules to ensure that NHS staff across the UK, including senior doctors, whose income is less than £200,000 can work additional hours for the NHS without their annual allowance being reduced.
IR35 Hits the Private Sector
Following on from the introduction of IR35 into the Public Sector back in 2016, the Private Sector has been waiting for such changes to affect themselves and with the Budget this year it has now been finalised that these changes will officially take place as of Aril 6th 2020. The wait is over and now Limited Company contractors are going to have to make some serious decisions as to how they are to continue in certain assignments whilst fall foul of being “inside” of IR35 reform.
As has been documented much over the past 18 months, Limited Company contractors have to be assessed under a government guidelines and CEST tool, which sees whether they are eligible to continue utilising their Limited Company, or will have to transition across to either a PAYE or Umbrella provider pay scheme.
There have been demonstrations outside Westminster, groups dismissing these changes but now the final nail has been put into that coffin, and all will now need to abide by the reform.
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