Budget 2020 at a glance

The new Chancellor Rishi Sunak has delivered his first Budget this afternoon in the House of Commons, setting out the government’s tax and spending plans for the year ahead.

Here are the main points:

Coronavirus response

• £5bn emergency response fund to support the NHS and other public services
• 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 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

Personal taxation, wages and pensions

• The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500
• The move, first announced in November, will take 500,000 employees out of the tax altogether
• Those earning more than £9,500 will be, on average, £85 a year better off
• 5% VAT on women’s sanitary products, known as the tampon tax, to be scrapped
• No other new announcements on income tax, national insurance or VAT
• Tax paid on the pensions of high earners, including doctors, to be recalculated

Alcohol, tobacco and fuel

• Fuel duty to be frozen for the 10th consecutive year
• Duties on spirits, beer, cider and wine to be frozen
• Tobacco taxes will continue to rise by 2% above the rate of retail price inflation
• This will add 27 pence to a pack of 20 cigarettes and 14 pence to a packet of cigars
• Business rate discounts for pubs to rise from £1,000 to £5,000 this year

Business, digital and science

• System of High Street business rates to be reviewed later this year
• Firms eligible for small business rates relief will get £3,000 cash grant
• Entrepreneurs’ Relief will be retained, but lifetime allowance will be reduced from £10m to £1m
• £5bn to be spent on getting gigabit-capable broadband into the hardest-to-reach places
• Science Institute in Weybridge, Surrey to get a £1.4bn funding boost
• An extra £900m for research into nuclear fusion, space and electric vehicles
• VAT on digital publications, including newspapers, e-books and academic journals to be scrapped from December

Environment and energy

• Plastic packaging tax to come into force from April 2022
• Manufacturers and importers whose products have less than 30% recyclable material will be charged £200 per tonne
• Subsidies for fuel used in off-road vehicles – known as red diesel – will be scrapped “for most sectors” in two years’ time
• Red diesel subsidies will remain for farmers and rail operators
• £120m in emergency relief for communities affected by this winter’s flooding and £200m for flood resilience
• Total investment in flood defences to be doubled to £5.2bn over next five years
• £640m “nature for climate fund” to protect natural habitats, including 30,000 hectares of new trees