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Budget 2020: How was it for you?

Maddy Christopher looks at how the day unfolded, along with the community’s response to the key issues raised in the 2020 Budget and its subsequent drama.

13th Mar 2020
Staff Writer AccountingWEB
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Budget

AccountingWEB readers seemed in good spirits the morning of the 2020 Budget as the public waited for the Chancellor of the Exchequer’s speech to begin. 

Users like Justin Bryant on Any Answers were happy with the interest rate cut announced at 7am: “I am in a good mood today as my mortgage is variable with the BoE Base Rate.

“Also, the British public like nothing better than to gear up on the tax-free equity in their home and spend the cash on whatever, so it's bound to have a positive impact on consumer spending etc.”

However, for others, like DJKL, this was more of a symbolic move than having any real future effect.

“We are getting it done”

Although Rishi Sunak’s Budget speech was more lively and persuasive than many of his predecessors, the incessantly repeated rhetoric of “we are getting it done” was largely met with rolling eyes from our live panel audience.

Getting it done

In the Live Budget Panel, PracticeWeb’s Ray Newman viewed “the Budget of a government that gets things done” as a continuation of Brexit rhetoric, and “the influence of Dominic Cummings and his remarkable message discipline”.

And for others, it was laughable:

 

To IR35, or not to IR35

Many people were hoping for clarification on the IR35 off-payroll rules for the private sector but were disappointed to find the speech only confirmed the changes would be going ahead as planned:

Budget Live Panel

For FreeAgent’s CEO Ed Molyneux, the lack of changes was disappointing: “The Chancellor had a great chance to provide the UK’s contracting industry with some much-needed relief by postponing, or even stopping, these reforms – but he has clearly decided to prioritise announcements that will gain favourable column inches rather than having a long-lasting benefit on this vitally important part of the economy.”

Statutory Sick Pay (SSP) for the COVID-19 infected

Burton Sweet partner Nigel Harris viewed the changes to SSP as political window dressing. Making it more accessible and extending it to all those affected by COVID-19 isolation measures would place an additional strain on employers rather than the government:

Budget Live Panel

Small business grant 

A passing comment in the Chancellor's speech announcing a £3,000 cash grant for small businesses generated the most interest among AccountingWEB members, including many self-employed accountants who might qualify. But there were frustrations about the lack of more details on the policy. 

According to RedFive, “With local authority administrating it though I won’t hold my breath to claim myself or point my clients towards the process of doing so.”

Increase to tapered thresholds

Responding to the pensions tax system preventing doctors from taking on more hours, Sunak proposed to increase both taper thresholds by £90,000 and reduce the minimum annual allowance to £4,000 for incomes above £300,000. This was met with “vigorous nodding... from the accountants in the room here at PracticeWeb towers”, reported editor Ray Newman.

Entrepreneurs’ relief

A wide concern over the likelihood of entrepreneurs’ relief being scrapped entirely was relieved by a “sensible reform” in reducing the lifetime limit from £10m to £1m.

Budget Live Panel

However, others did not see the plans laid out in Budget as realistic:

 

Technology Budget news

Technology, was, of course, not to be left out in Budget plans. There was barely a peep from the Chancellor in his speech about the controversial digital services tax, but paragraph 2.205 of the Budget red book confirmed, the government will introduce a new 2% tax on multinational companies turning over more than £500m that earn more than £25m a year from social media, search engines and online marketplaces serving the UK.

This measure will not be popular with Google, Facebook and Amazon and several other tech giants, who may be expected to fork out more than £1.5bn to the Exchequer over the next five years. More on that topic shortly.

Elsewhere, happy days are on the way for smaller UK tech businesses, which stand to gain significantly from lashings of government cash devoted to broadband investment (£5bn), extending R&D tax relief claims – possibly to cloud and data projects – and eight new technology institutes.

Commenting on proposed investments in technology, Sage UK & Ireland managing director Sabby Gill said, “The application of emerging and existing cloud technologies will be essential to get productivity back on track and we hope to see more on this in the next Budget. This could greatly impact digital adoption, which would bring with it faster processes, greater agility, better insights and the ability to forecast.”  

Budget

Replies (4)

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By emanresu
13th Mar 2020 12:33

Glad to see our servants, civil or otherwise, keeping up to date.

Multiple, present tense, referrals to a tax-free [sic!] dividend allowance of £5,000 in the Bodge-it 2020 documentation.

Thanks (1)
Replying to emanresu:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
13th Mar 2020 18:50

I know what you mean. In the PDF version of the tax information note there are two tables for Exchequer impact of the Digital Services Tax, one totalling £135m of receipts over five years - the same figures as in Table 2.1 of the Budget red book - and the other adding up to £2.1bn or thereabouts.

When I looked at the online version, there were different figures that added up to approx £1.5bn. That has now been amended to match the higher figure.

It's very difficult to find skilled people these days, isn't it?

Thanks (0)
Replying to John Stokdyk:
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By emanresu
14th Mar 2020 10:14

It's the curse of our time. All that "mission statement" carp gets buried beneath the evermore widespread foolishness of the human race.

I save the red book for later and gen myself up using the OOTLAR. This has the concentrated data - this year, next year - that I need to know asap. The errors I mentioned are at pages 25/6 of that document. Page 24 contains all the goofs that HMRC made when first describing their implementation of Marriage Allowance Transfer.

Sheesh !

Thanks (1)
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By mfbrown185
16th Mar 2020 11:46

I guess that this would fall under "Budget related" as it appeared in the Daily Mails business pages on 12th March "Clampdown on laundering"
The essentials (to be consulted upon Spring 2020) are that an "economic crime levy" to help fund efforts to tackle money laundering is to be introduced. Businesses subject to anti money laundering rules including banks, accountants, estate agents, solicitors would have to pay the new tax.

Forgive my naivety but I thought I was already paying a fortune to my Institute for oversight and (again) paying for a host of money laundering & monitoring services???

Anyone else picked up on this?

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