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Budget 2020 – what you need to know

If you’re wondering how your household finances are going to be affected by the Budget, it’s been a speech dominated by emergency measures to deal with coronavirus. Mindful of the fact that up to 20 percent of us could be off work at any one time as the outbreak spreads, the government announced extra support for people who need to take time off work because of illness or having to care for others. 

If you qualify for Statutory Sick Pay (SSP) it will now kick in from the time you’re advised to self-isolate and you’ll no longer have to get a fit note from your GP, you can call the NHS 111 service to get one. 

There’s also extra support for employees worried about having to take time off to look after children or other relatives who are sick. You’ll also be able to claim SSP if you need to take time off to care for them. 

The government has also said they will fund the costs of SSP for employers with workforces of 250 people or fewer for up to 14 days, so there should be no problem about claiming SSP if you need to. Anyone who has problems claiming SSP from their employer can call the HMRC helpline on 03000 560 630 (Textphone 0300 200 3212). 

For people who aren’t entitled to SSP, that’s if you’re earning less than £118 a week (£120 a week from April), a gig economy worker or self-employed, it will now be easier to claim other sickness benefits.  

If you’ve paid enough NI Contributions, Contributory Employment and Support Allowance will be paid from Day one, instead of having to wait eight days before being able to claim.  

Meanwhile, the minimum income floor has been temporarily removed for self-employed people who claim Universal Credit, meaning your earnings will stay topped up if your income falls either because you’re unable to work or demand for your services decreases. 

If you need to claim Universal Credit, you should do it as soon as possible as it can take up to five weeks to get a payment, although the government has said you will be able to apply for an advance payment once you’ve made your claim without having to go into a job centre if you have been advised to self-isolate.  

There’ll also be a £500m hardship fund available to local councils to help those most in need who’ve been affected by coronavirus. 

Much of the rest of the Budget speech focussed on future investment in the economy and public services but there were a few announcements that will affect your household finances. 

The National Insurance Contribution threshold rises from £8,632 to £9,500 leaving you around £104 a year better off if you’re an employee and around £84 better off if you’re self-employed.  

The government also intends to increase the National Living Wage by 6.2% to over £10.50 an hour for workers aged over 21 by 2024, meaning lower paid workers will be earning two-thirds of the median wage by then.  

The usual Budget headliners on fuel and alcohol duty followed the familiar ten-year trend with no increases on either duty until at least April 2021. Although they could still both be affected by other price rises in the coming year. 

The so-called Reading Tax – the duty paid on digital newspapers and books –  will come into line with print versions as VAT is abolished from 1 December 2020. And the much publicised Tampon Tax ends in January 2021. There are also plans to make it easier to access Tax Free childcare, affecting around 500,000 school age children. 

There’s also confirmation the four-year welfare benefits freeze is now officially over and that there will be extra Universal Credit support for parents of sick or premature babies, carers and victims of domestic violence. More details on how this will work are yet to be published. 

While fuel duty may not have increased, the government is keen to get people out of their polluting cars and into greener models. They’ve announced more investment to make sure drivers of electric vehicles are never more than 30 miles away from a rapid charging station and extra cash for incentives for get people to buy ultra-low emission models and reducing taxes on zero emission vehicles. 

wejustcompare team

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