Budget focuses on response to coronavirus

The Chancellor unveiled his Budget with a focus on support for businesses in the face of the new coronavirus.

Headache, Depression

 

Chancellor Rishi Sunak announced a range of measures in the Budget to help the economy withstand the impact of coronavirus, including changes to sick pay and to support for some self employed people.

He told MPs on Wednesday that “for a period it’s going to be tough”. But he insisted that the economy is robust and that “life will return to normal”. He announced that:

  • Employees will be able to access sick pay from their first day off work with coronavirus. Currently they must wait till the fourth day.
  • Self employed people on contributory employment and support allowance will get sick pay from day one rather than day eight.
  • A new system will be set up so people can get an official sick note through the NHS 111 service rather than having to visit or contact a doctor.
  • Employers will be refunded the cost of up to 14 days of sick pay for employees absent with coronavirus.
  • Tax payments will be deferred.
  • Banks will offer emergency loans under the coronavirus Business Interruption Loan Scheme.
  • Business rates will be temporarily abolished or slashed for small enterprises.
  • And the government will hand out £3,000 to qualifying companies to help tide them over the downturn that is expected to accompany coronavirus.

Sunak said up to a fifth of the working population may be off sick at one time due to coronavirus. He described the £30 billion stimulus package as “temporary, timely and targeted”.

The government also pledged to introduce a Carers Leave policy after it has consulted on the best way to go about that.

While there was some good news for homeworkers – the allowance they can take off their income tax liability to cover the extra expenses of working from home, such as heating and lighting, will rise from £4 per week to £6 per week, for many freelancers, there was disappointment as the Chancellor said the government was forging on with controversial plans to rejig tax through the IR35 reforms.

The Chancellor also announced an increase in the National Insurance threshold. Anyone employed is expected to be around £100 per year better off. A freelancer will be £78 better off. No-one will pay NI on earnings below £9,500 once the change has been introduced.  Public spending is also to increase on schools, hospitals and roads, but Labour criticised the lack of any mention of social care, although Health Secretary Matt Hancock said the money announced for the NHS was for social care too.



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