11 March 2020
How does the Budget affect Northern Ireland businesses?
The Chancellor, Rishi Sunak, delivered his Budget statement on Wednesday 11 March 2020. We have summarised the key points from the Budget and specific issues affecting Northern Ireland businesses.
- 1.1% in 2020-21
- 1.8% in 2021-22
- 1.5% in 2022-23
- 1.3% in 2023-24
- 2.1 % of GDP in 2020-21
- 2.4 % of GDP in 2021-22
- 2.8 % of GDP in 2022-23
- 2.8 % of GDP in 2023-24
A number of measures will be put in place to support the UK during the coronavirus outbreak. This includes:
- A £5 billion emergency response fund to support the NHS and other public services.
- Statutory sick pay will be paid from day one of illness.
- Statutory sick pay will be paid to all those who choose to self-isolate, even if they don't have symptoms.
- Contributory employment and support allowance benefit claimants will be able to claim sick pay on day one instead of after a week.
- The introduction of a "temporary coronavirus business interruption loan scheme" for banks to offer loans of up to £1.2 million to support small and medium-sized businesses.
- A £500 million hardship fund to help vulnerable people.
- Businesses with fewer than 250 employees will be refunded for statutory sick pay payments for two weeks.
Northern Ireland specific announcements
- The Northern Ireland Executive’s budget will increase by over £210 million in 2020-21.
- The government will provide funding for four City and Growth Deals in Scotland, Wales and Northern Ireland. This will include £126 million for Mid, South and West of Northern Ireland, and £36 million for Causeway Coast and Glens.
- The Shared Rural Network agreement includes a £5 billion investment to get gigabit-capable broadband into the hardest-to-reach areas of Northern Ireland, Scotland and Wales.
The personal allowance will remain at £12,500 and £50,000 for the higher rate threshold. See income tax rates and personal allowances.
National Living Wage and National Minimum Wage rates
The National Living Wage rate will increase to £8.72 per hour from April 2020. The National Minimum Wage will also increase from April 2020 to:
|21 to 24-year-olds||18 to 20-year-olds||16 and 17-year-olds||Apprentices|
|£8.20 per hour||£6.45 per hour||£4.55 per hour||£4.15 per hour|
Entrepreneurs' Relief will be retained, allowing business owners to pay a lower rate of tax when they come to sell all or part of their business. However, the lifetime allowance will be reduced from £10 million to £1 million. See Entrepreneurs' Relief.
National insurance threshold for employees and the self-employed will be raised from £8,632 to £9,500 from April 2020.
The VAT registration threshold will remain at £85,000 until April 2022.
Fuel duty will remain frozen.
Duty on other ciders, beer, wine and spirits will remain frozen.
Tobacco taxes will continue to rise by 2% above the rate of retail price inflation.
More than £600 billion is set to be spent on roads, rail, broadband and housing by the middle of 2025. £2.5 billion will be made available to fix potholes and resurface roads over the next five years.
There will be £900m for research into nuclear fusion, space and electric vehicles.
Plastic packaging tax will come into force from April 2022. Manufacturers and importers whose products have less than 30% recyclable material will be charged £200 per tonne.
Fuel subsidies for off-road vehicles - known as red diesel - will be scrapped for most sectors within the next two years. Farmers and rail operators will be excluded.
Total investment in flood defences will be doubled to £5.2 billion over the next five years.
There will be a £640 million "nature for climate fund" to protect natural habitats, including 30,000 hectares of new trees.