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| Budget 2020: What it means for you | Budget 2020: What it means for you |
| (32 minutes later) | |
| Chancellor Rishi Sunak's first Budget came as attention is focused on coronavirus, but what does it mean for your financial health? | Chancellor Rishi Sunak's first Budget came as attention is focused on coronavirus, but what does it mean for your financial health? |
| There were significant announcements on benefits, tax, and the wider economy. | There were significant announcements on benefits, tax, and the wider economy. |
| A tax cut for millions | A tax cut for millions |
| A tax break from the government regarding national insurance was promised in the Conservative manifesto. | A tax break from the government regarding national insurance was promised in the Conservative manifesto. |
| The current threshold sees employees and the self-employed paying contributions once they earn £166 a week, equivalent to an annual salary of £8,632 a year. From April, you start paying when earning £9,500. | The current threshold sees employees and the self-employed paying contributions once they earn £166 a week, equivalent to an annual salary of £8,632 a year. From April, you start paying when earning £9,500. |
| That will mean 500,000 people will no longer have to pay this tax, according to independent economists at the Institute for Fiscal Studies (IFS). | That will mean 500,000 people will no longer have to pay this tax, according to independent economists at the Institute for Fiscal Studies (IFS). |
| Those still paying will save up to £85 a year on average. The chancellor said it would be just over £100 a year, but that calculation may not include the self-employed. | Those still paying will save up to £85 a year on average. The chancellor said it would be just over £100 a year, but that calculation may not include the self-employed. |
| The IFS says 8% of the gains go to the poorest 20% of working households, so it is those on a decent income who may benefit the most. However, those working in a number of low-paying part-time jobs could see their take-home pay increase significantly. | |
| Another tax to be cut is VAT on digital books, newspapers and magazines. | Another tax to be cut is VAT on digital books, newspapers and magazines. |
| What happens if coronavirus hits my finances? | What happens if coronavirus hits my finances? |
| Many of the measures aimed to tackle the impact of coronavirus benefit small businesses and so protect some jobs. This has been coordinated with the interest rate cut announced by the Bank of England. | Many of the measures aimed to tackle the impact of coronavirus benefit small businesses and so protect some jobs. This has been coordinated with the interest rate cut announced by the Bank of England. |
| Specific personal finance changes include the chancellor saying all of those advised to self-isolate, even if they do not show symptoms, are to receive statutory sick pay if eligible. | Specific personal finance changes include the chancellor saying all of those advised to self-isolate, even if they do not show symptoms, are to receive statutory sick pay if eligible. |
| UK employees have already started to get statutory sick pay from the first day off work, to help contain coronavirus. This is paid by the employer, but smaller businesses with fewer than 250 employees can reclaim the cost of paying sick pay for the 14 days of isolation. | UK employees have already started to get statutory sick pay from the first day off work, to help contain coronavirus. This is paid by the employer, but smaller businesses with fewer than 250 employees can reclaim the cost of paying sick pay for the 14 days of isolation. |
| Those who are not eligible for sick pay, particularly the self-employed, will be able to claim Employment and Support Allowance (ESA) from day one of "illness" rather than day eight. | Those who are not eligible for sick pay, particularly the self-employed, will be able to claim Employment and Support Allowance (ESA) from day one of "illness" rather than day eight. |
| ESA is paid to those who are too sick to work, provided they meet certain conditions. It is worth £73.10 a week, or £57.90 for the under-25s. The complexity of this benefit may mean this change is unlikely to affect a lot of people. | ESA is paid to those who are too sick to work, provided they meet certain conditions. It is worth £73.10 a week, or £57.90 for the under-25s. The complexity of this benefit may mean this change is unlikely to affect a lot of people. |
| Councils will also have access to a hardship fund to help vulnerable people in their area. | Councils will also have access to a hardship fund to help vulnerable people in their area. |
| More on Budget 2020 | More on Budget 2020 |
| Changes on pensions tax for higher earners | Changes on pensions tax for higher earners |
| The highly complicated way in which high earners are taxed is set to change. Basically, tax relief on pensions becomes less generous if annual income exceeds £150,000 a year. This has become a problem as the income cap includes the value of pensions earned, not just salary. | The highly complicated way in which high earners are taxed is set to change. Basically, tax relief on pensions becomes less generous if annual income exceeds £150,000 a year. This has become a problem as the income cap includes the value of pensions earned, not just salary. |
| Some doctors have been refusing to work extra hours (and earning more) because they were being landed with much bigger tax bills. | Some doctors have been refusing to work extra hours (and earning more) because they were being landed with much bigger tax bills. |
| They, and other high earners, are currently affected by this restriction once income goes over £110,000. The government has promised this may only kick in once annual income exceeds £200,000. | They, and other high earners, are currently affected by this restriction once income goes over £110,000. The government has promised this may only kick in once annual income exceeds £200,000. |
| What about booze and fuel duties? | What about booze and fuel duties? |
| The duties on alcoholic drinks - beer, wine and cider - are all being frozen. So that means no extra tax on a pint or glass. | The duties on alcoholic drinks - beer, wine and cider - are all being frozen. So that means no extra tax on a pint or glass. |
| There has been a freeze on fuel duty for a decade, and this will continue for at least another year. | There has been a freeze on fuel duty for a decade, and this will continue for at least another year. |
| About 60% of the price you pay for fuel is tax - a mixture of fuel duty and VAT. | About 60% of the price you pay for fuel is tax - a mixture of fuel duty and VAT. |
| Duty on cigarettes and cigars will go up by the Retail Prices Index (RPI) measure of inflation plus 2% until the end of this Parliament (usually five years), and hand-rolling tobacco duty will rise by RPI plus 6% in April. | Duty on cigarettes and cigars will go up by the Retail Prices Index (RPI) measure of inflation plus 2% until the end of this Parliament (usually five years), and hand-rolling tobacco duty will rise by RPI plus 6% in April. |
| What else has been announced? | What else has been announced? |
| The 5% rate of VAT on sanitary products - referred to as the "tampon tax" - will be abolished from January. This was trailed by the Treasury at the weekend. | The 5% rate of VAT on sanitary products - referred to as the "tampon tax" - will be abolished from January. This was trailed by the Treasury at the weekend. |
| People can put a lot more into tax-free savings for children. The allowance for Junior Isas (Individual Savings Accounts) and Child Trust Funds will be increased from £4,368 to £9,000 in April. | |
| What we already knew | What we already knew |
| The chancellor made a string of announcements, but some big changes to your finances in April had already been set. They include: | The chancellor made a string of announcements, but some big changes to your finances in April had already been set. They include: |