Budget 2020 – Winners and losers

This afternoon, Rishi Sunak has delivered the first Budget of the new Conservative government. With a large majority behind him, the theme of the Chancellor’s speech was to deliver the promises made in the party’s election manifesto or, as Sunak himself repeatedly said, to ‘get things done’.

Of course, the coronavirus outbreak has significantly changed the Chancellor’s plans. Opening his speech, Sunak said: “We will rise to this challenge – this virus is the key challenge facing our country today.”

With a package of measures designed to support the economy through the spread of coronavirus, plus a pledge to deliver manifesto promises, who were the winners and losers in the 2020 Budget?

Winners

Borrowers

Even before the Budget began, the Bank of England had already announced measures to support the economy, including an emergency reduction in the Base rate from 0.75% to 0.25%.

The outgoing Governor of the Bank of England, Mark Carney, said: “The Bank of England’s role is to help UK businesses and households manage through an economic shock that could prove large and sharp, but should be temporary.”

If you have a tracker mortgage – where your interest rate is directly linked to the Base rate – you should immediately see a reduction in your repayments.

If your mortgage is linked to your lender’s Standard Variable Rate (SVR) then you may have to wait and see if you benefit. There is hope, as after the Base rate was last cut in 2016 eight of the UK’s top 10 lenders reduced their SVR by the same amount soon after.

Small businesses

With experts predicting that the coronavirus outbreak is likely to have a negative effect on the economy, the Chancellor announced a £12 billion package of support to respond to the economic impact of the virus.

Much of this support was aimed at small businesses, particularly those in the retail, leisure and hospitality sectors who are likely to be most significantly impacted by the public having to stay at home and self-isolate.

For businesses with fewer than 250 employees, the cost of any Statutory Sick Pay caused by the coronavirus (up to a limit of 14 days per individual) will be refunded to the company, in full, by the government.

The Chancellor also announced that:

  • Business rates for the next financial year for retail, leisure and hospitality firms with a rateable value of less than £51,000 would be abolished
  • £2.2 billion of funding for local authorities in England would be provided, to enable grants of £3,000 to be made to around 700,000 business currently eligible for Small Business Rate Relief
  • A new Coronavirus Business Interruption Loan Scheme will see banks offer loans of up to £1.2m to support SMEs, with the government providing a guarantee of 80% on each loan.

In addition to emergency measures to tackle the coronavirus outbreak, there was other good news for small businesses.

The government also confirmed that it is delivering on its commitment to increase the Employment Allowance to £4,000. This means that businesses will be able to employ four full-time employees on the National Living Wage without paying any employer National Insurance contributions (NICs).

The Chancellor also confirmed that Corporation Tax rate would remain at 19%.

Those paying National insurance contributions

Delivering on a manifesto commitment, the Chancellor announced that the threshold for paying National Insurance contributions would rise, from £8,632 to £9,500.

This equates to a tax cut for around 31 million people, saving a typical employee more than £100 a year.

Low earners

The Chancellor confirmed that, by 2024 (and economic conditions permitting), the National Living Wage should reach two-thirds of median earnings, equivalent to over £10.50 an hour.

Many people affected by the Tapered Annual Allowance

In recent months, the issue of the pensions Tapered Annual Allowance has made the headlines. Large numbers of NHS staff were refusing to work additional shifts because of the taper, which left many facing large tax bills.

Having promised an urgent review into the taper, the Chancellor announced that the thresholds at which the Tapered Annual Allowance came into effect would rise by £90,000.

Now, if your threshold income is above £200,000, then you need to check if your ‘adjusted income’ (essentially all income that you are taxed on including dividends, savings interest and rental income, before tax plus the value of your own and any employer pension contributions) is over £240,000.

If it is above £240,000, the annual allowance will reduce by £1 for every £2 that your ‘adjusted income’ exceeds £240,000.

According to the Chancellor, this will take 98% of NHS consultants and 96% of GPs out of the taper.

People saving for children

In the Budget statement, the government said: “By saving towards their future, families can give children a significant financial asset when they reach adulthood – helping them into further education, training, or work.”

To support this, the annual subscription limit for the Junior ISA (JISA) and Child Trust Fund (CTF) will more than double in the 2020/21 tax year, from £4,368 to £9,000.

The adult ISA subscription limit will remain at £20,000.

Anyone driving on the A303

For more than five years there have been plans to improve the long stretch of A-road that passes the UNESCO World Heritage site at Stonehenge.

After years of delay, drivers heading to or from the South West received some good news with the Chancellor announcing that the government will build a new, high-quality dual carriageway and a two-mile tunnel in the South West to speed up journeys on the A303, and to remove traffic from the iconic setting of Stonehenge.

For drivers in the area, there is finally light at the end of the (two-mile) tunnel.

Readers

To support learning, the government will introduce legislation on 1 December 2020 to remove VAT on e-publications such as magazines and e-books.

Women

Now that the UK has left the EU, the Chancellor says that the country can reduce the cost of essential sanitary products for women in the UK.

This means that, from 1 January 2021, the ‘tampon tax’ will be abolished through the application of a zero rate of VAT on women’s sanitary products.

Drivers and drinkers

While there were no tax cuts for drivers and drinkers, the Chancellor announced that he was freezing:

  • Spirits duty
  • Duty on beer
  • Duty on cider and wine
  • Fuel duty

Losers

Savers

With the Base rate falling to 0.25%, it’s reasonable that long-suffering savers will see yet more falls in interest rates.

Moneyfacts reported that, after the Bank of England last reduced the Base rate in 2016, the average savings rate for an easy access bank account fell by 0.14% in the ensuing three months.

Savers will also see no increase in the amount they can contribute to an ISA in the 2020/21 tax year, and so the limit of £20,000 remains.

Non-UK nationals buying UK property

As widely predicted, a 2% Stamp Duty Land Tax surcharge on non-UK residents buying a residential property in England and Northern Ireland will come into force in 2021.

The aim of this measure is to help to control house price inflation and to support UK residents who want to get on onto and move up the housing ladder.

The Chancellor says that the money raised from the surcharge will be used to help address rough sleeping, with the government having committed to ending rough sleeping in this parliament.

Business owners and entrepreneurs

Entrepreneurs’ relief offers a reduced 10% rate of Capital Gains Tax on qualifying disposals.

With immediate effect, the lifetime limit on gains that are eligible for Entrepreneurs’ Relief will reduce from £10 million to £1 million. The Chancellor says that 80% of small business owners will be unaffected, but larger businesses or those realising significant gains on disposals will pay more tax.

High earners making pension contributions

While the threshold earnings level for the Tapered Annual Allowance coming into effect have been raised by £90,000, those on the very highest incomes will see a significant reduction in the amount they can contribute to a pension and retain tax relief.

The minimum level to which the annual allowance can taper down will reduce from £10,000 to £4,000 from April 2020. This reduction will only affect individuals with total income (including pension accrual) over £300,000.

However, the lifetime allowance, the maximum amount someone can accrue in a registered pension scheme in a tax-efficient manner over their lifetime, will increase in line with CPI for 2020-21, rising to £1,073,100.

Manufacturers using plastic

The Chancellor announced that the government will introduce a new Plastic Packaging Tax from April 2022 to incentivise the use of recycled plastic in packaging.

The Budget set the rate at £200 per tonne of plastic packaging that contains less than 30% recycled plastic, and will apply to the production and importation of plastic packaging.

Potholes

Potholes are likely to face a difficult year, with the Chancellor announcing a Potholes Fund of £500 million for each of the next five years.

He expects 50 million potholes to be filled in during that time.

Get in touch

If you have any questions about the Budget and how it might affect you, please do not hesitate to get in touch.

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YOUR PERSONAL INFORMATION

Information we collect from you

We collect and process some or all of the following types of information from you in the course of providing our services and other information to you and your use of our website www.bluewealth.co.uk:

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USES MADE OF YOUR INFORMATION

Purposes of, and lawful basis for, processing

We use information held about you for the following purposes:

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Marketing

In addition to the above uses We may use your information to notify you about goods or services which may be of interest to you. If you do not want Us to use your data in this way, please either (i) tick the relevant box situated on your service charter on which We collect your data; (ii) unsubscribe from our electronic communications using the method indicated in the relevant communication; or (iii) inform Us at any time by contacting Us at the contact details set out below.

DISCLOSURE OF YOUR INFORMATION

We routinely disclose your personal data to third parties as follows:

  • We pass your information to Best Practice, who provide us with various compliance services. Best Practice is a separate data controller, and details of what they do with your data can be found here: https://www.bestpractice.co.uk/best-practice/privacy-policy.
  • We may pass your information to our third-party service providers, agents, subcontractors and other associated organisations for the purposes of completing tasks and providing services to you on our behalf (e.g. to host our servers).

We may disclose your personal data to any member of our corporate group, which means our subsidiaries, our ultimate holding company and its subsidiaries, as defined in section 1159 of the UK Companies Act 2006 (where applicable).

We may also disclose your personal data to third parties:

  • in the event that We sell or buy any business or assets, in which case We may disclose your personal data to the prospective seller or buyer of such business or assets; or
  • if We or substantially all of our assets are acquired by a third party, in which case personal data held by Us about our customers will be one of the transferred assets; or
  • if We are under a duty to disclose or share your personal data in order to comply with any legal obligation, or in order to enforce or apply our client agreement/service charter; or
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Other than as set out above and save insofar as is necessary in order for Us to carry out our obligations arising from any contracts entered into between you and Us or with any regulatory or other legal obligation, We will not share your data with third parties unless We have procured your express consent to do so.

STORING YOUR PERSONAL DATA

Security

We take appropriate measures to ensure that any personal data are kept secure, including security measures to prevent personal data from being accidentally lost, or used or accessed in an unauthorised way. We limit access to your personal data to those who have a genuine business need to know it. Those processing your information will do so only in an authorised manner and are subject to a duty of confidentiality.

We also have procedures in place to deal with any suspected data security breach. We will notify you and any applicable regulator of a suspected data security breach where We are legally required to do so.

Unfortunately, the transmission of information via the internet is not completely secure. Although We will do our best to protect your personal data, We cannot guarantee the security of your data transmitted to the Website; any transmission is at your own risk. Once We have received your information, We will use strict procedures and security features to try to prevent unauthorised access.

The Website may, from time to time, contain links to and from the websites of our partner networks, advertisers and affiliates. If you follow a link to any of these websites, please note that these websites have their own privacy policies

and terms of use and that we do not accept any responsibility or liability for these policies and terms of use. Please check these policies before you submit any personal data to these websites.

Keeping your personal data up to date

If your personal details change you may update them by accessing this data through the wealth platform portal, or by contacting Us using the contact details below. If you have any questions about how We use data collected which relates to you, please contact Us by sending a request by email to admin@bluewealth.co.uk

We will endeavour to update your personal data within 5 working days of any new or updated personal data being provided to Us, in order to ensure that the personal data We hold about you is as accurate and up to date as possible.

How long we keep your personal data

  • We will hold personal data (e.g. name, address, date of birth and contact details) in line with our regulatory and legal obligations as set out by our regulator – currently a minimum of 5 years for investment business and indefinitely for occupational pension transfer or opt-out business.
  • If you contact Us as a prospective customer using Our e-mail address or via Our Website contact form, requesting general information about our services, We will hold that personal data you choose to provide such as your name, address, e-mail address, for 12 months from Our last point of contact.

Where we store your personal data

All of the information that We hold about you is stored on our secure servers within the EEA.

The data that We collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). By submitting your personal data, you agree to this transfer, storing or processing. We will take all steps reasonably necessary to ensure that your data is held securely and in accordance with this Policy. Countries outside the EEA do not have the same data protection laws as the United Kingdom and EEA and We have therefore ensured that any of our suppliers who may transfer your personal data outside the EEA has put in place appropriate measures to protect your data, either by being a member of the US-EU Privacy Shield, or by entering into a European Commission approved contract (as permitted under Article 46(5) of the General Data Protection Regulation).

If you would like further information, please contact Us or the Compliance Director at Best Practice (see ‘Contact’ below). We will not otherwise transfer your personal data outside of the United Kingdom or EEA or to any organisation (or subordinate bodies) governed by public international law or which is set up under any agreement between two or more countries.

YOUR RIGHTS

Under the General Data Protection Regulation you have a number of important rights free of charge. In summary, those include rights to:

  • access to your personal data and to certain other supplementary information that this Policy is already designed to address
  • require Us to correct any mistakes in your information which We hold
  • require the erasure of personal data concerning you in certain situations
  • receive the personal data concerning you which you have provided to Us, in a structured, commonly used and machine-readable format and have the right to transmit those data to a third party in certain situations
  • object at any time to processing of personal data concerning you for direct marketing
  • object to decisions being taken by automated means which produce legal effects concerning you or similarly significantly affect you
  • object in certain other situations to our continued processing of your personal data
  • otherwise restrict our processing of your personal data in certain circumstances
  • claim compensation for damages caused by our breach of any data protection laws.

For further information on each of those rights, including the circumstances in which they apply, see the Guidance from the UK Information Commissioner’s Office (ICO) on individuals rights under the General Data Protection Regulation.

If you would like to exercise any of those rights, please:

  • email, call or write to US or our Compliance Director at Best Practice (see the ‘Contact’ section below for details).
  • let Us have enough information to identify you [(e.g. account number, user name, registration details)],
  • let Us have proof of your identity and address (a copy of your driving licence or passport and a recent utility or credit card bill), and
  • let Us know the information to which your request relates [including any account or reference numbers, if you have them]

HOW TO COMPLAIN

We hope that We or our Compliance Director can resolve any query or concern you raise about our use of your information.

The General Data Protection Regulation also gives you right to lodge a complaint with a supervisory authority, in particular in the European Union (or European Economic Area) state where you work, normally live or where any alleged infringement of data protection laws occurred. The supervisory authority in the UK is the Information Commissioner who may be contacted at https://ico.org.uk/concerns/ or telephone: 0303 123 1113.

CHANGES TO OUR PRIVACY POLICY

We reserve the right to modify this Policy at any time. Any changes We may make to our Policy in the future will be notified and made available to you using the Website. Your continued use of the services and the Website shall be deemed your acceptance of the varied privacy policy.

INFORMATION ABOUT OUR USE OF COOKIES

We may collect information about [your mobile phone, computer or other device from which you access the Website] including where available [your IP address, operating system and browser type], for systems administration [and to report aggregate information to third party affiliates]. This is statistical data about our users’ browsing actions and patterns and does not identify any individual. We may, however, use such information in conjunction with the data We have about you in order to track your usage of our services.

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The cookies We use include:

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CONTACT

All questions, comments and requests regarding this Privacy and Cookies Policy should be addressed to Robert Bowers, admin@bluewealth.co.uk or write to Us at 141 Whiteladies Road, Bristol, BS8 2QB. Or alternatively please contact our Compliance Director at Best Practice IFA Group Ltd, Holmwood House, Broadlands Business Campus, Langhurstwood Road, Horsham, West Sussex, RH12 4QP, telephone number 01403 334455, or via email at info@bestpractice.co.uk