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What the budget announcements mean for professionals

What the budget announcements mean for professionals

Chancellor Rishi Sunak delivered his debut budget today with the shadow of the Coronavirus hanging heavy over proceedings. We highlight some of the key announcements that may affect our members and customers.

Taxes and pay

A central pledge in the Conservative election manifesto was to increase the National Insurance threshold from £8,632 to £9,500, representing a tax cut for more than 30 million workers. This means a saving of around £104 for the typical employee and £78 for a typical self-employed person during 2020/21.

Pensions and savings

As expected, the Chancellor moved to reduce the impact of the annual allowance taper for higher earners.

The Chancellor raised the threshold income by £90,000 to £200,000, a £2 billion commitment. The change means those whose income is less than £200,000 can work extra hours without their annual allowance being reduced.

Ian Macvie, Technical Manager at Wesleyan, added: "Even if the new threshold income of £200,000 is exceeded, the taper will only start to apply where the individual's adjusted income (basically their threshold income plus the value of the individual's pension savings) exceeds £240,000."

At the same time, the lifetime allowance for pensions moved in line with the Consumer Price Index, increasing by £18,100 to £1.073 million.

The annual allowance for Junior ISAs and Child Trust Funds was increased from £4,368 to £9,000, while the standard ISA allowance was held at £20,000.

Business

The lifetime limit on gains eligible for Entrepreneurs Tax Relief, which reduced the Capital Gains Tax payable on selling a business, was cut rather than abolished. Only the first £1 million will now be eligible for the relief, down from £10 million.

As part of a multi-billion pound package to address the impact of Coronavirus, the Chancellor announced that the Government would refund the cost of Statutory Sick Pay for up to 14 days for businesses with fewer than 250 employees.

Small businesses affected by Coronavirus will also be able to access loans of up to £1.2 million.

Transport

In a surprise to many, the Chancellor announced that the freeze on fuel duty would remain in place for a tenth consecutive year, representing a saving of £1,000 for the average car driver.

Education

The Budget reconfirmed that starting salaries for teachers are set to rise to £30,000 by September 2022.

The 'Reading Tax' levied on books, magazines, newspapers and more will be abolished from December 2020.

Housing

Nearly £1.1 billion of allocations from the Housing Infrastructure Fund, which will support the building of nearly 70,000 new homes in high-demand areas across the country.

Health and social care

The Budget included funding for the recruitment, training and retention of up to 6,000 more GPs and 50 million additional GP appointments during this parliament.

If you would like further information on any of the topics covered in our overview, book a one-to-one meeting with your local Wesleyan Financial Services Consultant at a time and place that suits you. Please call 0800 980 0522, quoting 1002367 (lines are open Monday to Wednesday from 8am to 8pm, Thursday 8am to 7pm and Friday 8am to 5pm).

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