11th March 2020
The 2020 Spring Budget – An Overview of the Main Points from Davenham Asset Finance
Welcome to the Davenham view on the newly appointed Chancellor, Rishi Sunak’s very first Budget announcement – the first one after a no-deal Brexit has been confirmed, of which there was hardly any mention. What did make the Budget headlines as expected, was the Coronavirus outbreak, being allocated £30bn and subsequently declared today as a pandemic by the WHO. Here’s what we’ve taken as most relevant for our network, from today’s announcement.
Ups and downs expected for the economy
A 0.3% reduction was applied to the 2019 UK economy predicted growth changing from 1.4% to 1.1% declared today, making it the slowest growth period since 2009. We should then expect the economy to bounce back up to 1.8% for the following year and then slow down again for 2022-2023 to 1.5% and again the following year to 1.3%.
Inflation is forecast at 1.4% and borrowing will increase to £14.6bn, equivalent to 2.1% of GDP, however the Chancellor assured that at the end of the current Parliament, debt as a percentage of GDP would be lower than it is currently.
Farmers & the rail sector to continue moving with red diesel
The transport sector (road and rails) will be included in a £600bn spend by 2025, including £27bn for motorways and other arterial roads, and £2.5bn for road surfacing.
Mr Sunak confirmed that farmers and rail operators will be excluded from the abolishment of subsidies for using ‘red diesel’ which will be made applicable to other off-road vehicle users within 2 years.
Tackling the big waste issue
In an attempt to drive the reduction of the UK’s carbon footprint and contribution to plastic waste, April 2022 will see a new Plastic Packaging tax come into force. A charge of £200 per tonne will be applied to manufacturers and importers using less than 30% recyclable materials.
Business management and advancement
A budget of £900m was declared by Mr Sunak towards research into nuclear fusion, space and electric vehicles, and £5bn will be spent on getting gigabit-capable broadband in difficult-to-reach places across the country. Something that will disappoint many business owners will be the slashing of the Entrepreneur’s Relief tax break from £10m to £1m over a lifetime.
Funding and finance
From a funding perspective, a £3,000 grant for firms eligible for small business rates relief was announced, as well as an uplift in business rate discounts for pubs to £5,000. And as a result of Coronavirus, business interruption loans of up to £1.2m will be made available for small firms. In light of the Covid-19 effects, shops, cinemas, restaurants and hotels with a rateable value of less than £51,000 have been made eligible for a business rates holiday, and it was also announced by the Chancellor, that High Street business rates are to be reviewed this year.
So there you have a summary of the key points from Davenham – we would welcome your thoughts as an SME and if you have any queries or concerns as a result of any of the announced changes that might affect you as a business owner, please call the Davenham team on 0161 832 8484.
Ups and downs expected for the economy
A 0.3% reduction was applied to the 2019 UK economy predicted growth changing from 1.4% to 1.1% declared today, making it the slowest growth period since 2009. We should then expect the economy to bounce back up to 1.8% for the following year and then slow down again for 2022-2023 to 1.5% and again the following year to 1.3%.
Inflation is forecast at 1.4% and borrowing will increase to £14.6bn, equivalent to 2.1% of GDP, however the Chancellor assured that at the end of the current Parliament, debt as a percentage of GDP would be lower than it is currently.
Farmers & the rail sector to continue moving with red diesel
The transport sector (road and rails) will be included in a £600bn spend by 2025, including £27bn for motorways and other arterial roads, and £2.5bn for road surfacing.
Mr Sunak confirmed that farmers and rail operators will be excluded from the abolishment of subsidies for using ‘red diesel’ which will be made applicable to other off-road vehicle users within 2 years.
Tackling the big waste issue
In an attempt to drive the reduction of the UK’s carbon footprint and contribution to plastic waste, April 2022 will see a new Plastic Packaging tax come into force. A charge of £200 per tonne will be applied to manufacturers and importers using less than 30% recyclable materials.
Business management and advancement
A budget of £900m was declared by Mr Sunak towards research into nuclear fusion, space and electric vehicles, and £5bn will be spent on getting gigabit-capable broadband in difficult-to-reach places across the country. Something that will disappoint many business owners will be the slashing of the Entrepreneur’s Relief tax break from £10m to £1m over a lifetime.
Funding and finance
From a funding perspective, a £3,000 grant for firms eligible for small business rates relief was announced, as well as an uplift in business rate discounts for pubs to £5,000. And as a result of Coronavirus, business interruption loans of up to £1.2m will be made available for small firms. In light of the Covid-19 effects, shops, cinemas, restaurants and hotels with a rateable value of less than £51,000 have been made eligible for a business rates holiday, and it was also announced by the Chancellor, that High Street business rates are to be reviewed this year.
So there you have a summary of the key points from Davenham – we would welcome your thoughts as an SME and if you have any queries or concerns as a result of any of the announced changes that might affect you as a business owner, please call the Davenham team on 0161 832 8484.