Budget Update March 2020

At lunchtime today, new Chancellor Rishi Sunak delivered his first budget for the UK. Focusing initially on the challenges of coronavirus, he went on to highlight the other top issues to be addressed following Brexit.

Along with the government’s response to the current coronavirus situation, we have summarised below the main points you may find useful.  

  • Coronavirus
    - £30bn stimulus package designed to complement measures announced by the Bank of England
    - £2bn sick pay rebates for up to 2million small businesses with fewer than 250 employees

  • Interest Rates
    - The Bank of England made an emergency interest rate cut of 0.5%.
    - Policymakers reduced rates from 0.75% to 0.25%, taking borrowing costs down to the lowest level in history
    - BOE to free up billions of pounds of extra lending power to help banks support firms
    - Governor Mark Carney said the UK had seen a sharp fall in spending on non-essential goods and suggested the UK economy could shrink in the coming months

  • Tax
    - National Insurance threshold to rise from £8,632 to £9,500 saving a typical employee £104 annually

  • Savings & Investments 
    - From Monday 6 April the amount you'll be able to save tax-free in a Junior ISA or Child Trust Fund will rise from £4,368 to £9,000 per tax year

  • Business
    - Entrepreneurs' Relief lifetime limit has been reduced from £10m lifetime allowance to £1m

  • Pensions
    - Tapered annual allowance threshold has been increased by £90k to £200k, meaning individuals with an income below this will not be affected by the allowance
    - The minimum level that the allowance can taper has been reduced from £10,000 to £4,000

  • Education
    - £1.5bn over five years to improve further education college buildings

For the BBC’s summary of how today’s budget affects you click here, and for the key points explained by Sky News, click here.

How we can help

To find out if your plans for retirement, pensions or long-term investments will be affected by these recent changes, please contact us for a free, no-obligation meeting for further information, on 0141 572 1340 or by email at enquiries@mccreafs.co.uk.

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bbc.co.uk; news.sky.com