The first Budget of the year and the first for the new Chancellor of the Exchequer Rishi Sunak, has been presented to the houses of parliament this afternoon. The main theme was the stimulus to help tackle the coronavirus both with the NHS and the wider economy. This includes the refund of statutory sick pay and cash grants for some smaller businesses along with the promise to support the NHS financially.
Away from the coronavirus issues, additional funding is being targeted towards Research and Development to create a brighter future in the country as well as ‘greener’ fuel and transport.
All that said, what changes will be affecting the average Joe?
First for the girls in our office, great news that there is no duty increase on our gin – yeah. In fact, duty on spirits, beer, wine and cider has been frozen along with that on fuel for yet another year.
Employee national insurance threshold is increasing from £8,632 to £9,500 from April 2020 tax year, which will result in an annual saving of approximately £104 per year (£8.68 per month).
Personal allowance for income tax and the relevant rates remain the same along with the ISA allowances at £20,000 per tax year. The annual contributions that can be made to junior ISAs (child trust fund) has almost doubled, from £4,368 to £9,000.
The issues higher income earners, in particular highlighted by the NHS, have encountered with the annual allowance pension taper have been hiked by £90,000 which means that individuals will now not be affected until their adjusted income is in excess of £240,000. However, he giveth and he taketh away in that the allowance will now taper down to £4,000 rather than £10,000.
The other unexpected announcement this morning came from Mark Carney, the current governor of the Bank of England who leaves his post on Monday 16th March, he handed the UK economy a parting handshake with a 0.5% reduction in the base rate from 0.75% to 0.25%, equalling the lowest ever recorded rate. This has been done to pre-empt any strain on the UK economy that may potentially happen due to the coronavirus although Mr Carney stressed that the future impact is still uncertain.
In summary, not a vast amount of changes to contend with this time but we will get to do it all again in November.