Chancellor
delivers Budget to meet ‘challenging times’
Chancellor Rishi Sunak delivered his first Budget, and the first since
the UK’s departure from the European Union, against the backdrop of the
coronavirus outbreak.
The Chancellor announced a £30 billion stimulus package to support the
economy through coronavirus contagion and pledged to give the NHS whatever
extra resources are needed to cope.
Following the news that the Bank of England had reduced interest rates
to 0.25%, in an emergency response to the coronavirus, Mr Sunak put further
measures in place.
These include Statutory Sick Pay (SSP) for employees who are advised to
self-isolate, even if they are displaying no symptoms. The government will also
meet some SSP costs for businesses.
In addition, business rates for shops, cinemas, restaurants and music
venues in England with a rateable value below £51,000 have been suspended for a
year. This tax holiday will be worth up to £25,000 to thousands of businesses
across the retail, leisure and hospitality sectors.
Citing the latest economic forecasts from the Office for Budget
Responsibility, Mr Sunak said the economy is predicted to grow by 1.1% this
year. However, the GDP forecast does not fully account for the impact of
coronavirus.
Turning to duties, tax on beer, wine, cider and spirits have been frozen
while tobacco duty will continue to rise by inflation plus 2%. Fuel duty will
also remain frozen, for a tenth consecutive year, despite widespread
speculation that it would rise. However, Mr Sunak introduced other green
measures including a new tax on plastic packaging and freezing the climate
change levy on electricity while raising it on gas. The Chancellor also
promised to spend £500 million to support the rollout of new rapid charging
hubs for electric cars.
In addition, Mr Sunak resisted calls to end Entrepreneurs' Relief,
although the lifetime allowance will be reduced from £10 million to £1 million.
The Chancellor will abolish the so-called ‘tampon tax’, reducing the VAT rate
on sanitary products to zero from 1 January 2021, as well as scrapping VAT on
digital e-publications, including e-books, e-newspapers, e-magazines and
academic e-journals, from 1 December 2020.