The Budget: how does it affect you?
A plastic packaging tax and the impact of the coronavirus were among the key points in Chancellor Rishi Sunak’s first Budget, and we take a look at how it will affect Britain’s salon and spa market.
How the Budget 2020 will affect your business:
Several measures were outlined to help tackle the impact of Covid-19 virus on small businesses up and down the country. Sunak said all of those advised to self-isolate, even if they don’t have symptoms, are to receive statutory sick pay if eligible.
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 the spread of the virus.
Those not eligible for sick pay, such as the self-employed, will be able to claim Employment and Support Allowance (ESA) from day one of “illness” instead of day eight. It is worth £73.10 per week, or £57.90 for under-25s.
A £5 billion emergency response fund has been allocated to support the NHS and other public services.
Taxes and wages
A plastic packaging tax is set to come into force from April 2022 to help bolster recycling and cut down plastic waste. Manufacturers and importers whose products have less than 30% recyclable material will be charged £200 per tonne.
Sunak claimed the move would increase the use of recycled plastic in packaging by 40%, which he said is “equal to carbon savings of nearly 200,000 tonnes".
The National Insurance Contributions tax threshold will rise from £8,632 to £9,500, saving employees more than £100 a year.
Meanwhile, those aged 25 and over will get the National Living Wage (NLW) of £8.72 an hour, a rise of 6.2%, with younger works also getting more. This is paid by employers.
The 5% VAT on women’s sanitary products – aka the tampon tax – will be scrapped from January 2021.
Business rates will be abolished for smaller companies in retail, leisure and hospitality, but this will only apply to premises with a rateable value of up to £51,000.
Any company eligible for small business rates relief will be allowed a £3,000 cash grant – a £2bn injection for 700,000 small businesses.
State of the economy
The economy is predicted to grow by 1.1% this year, but this does not take into account the impact of the coronavirus. This would be the slowest economic growth since 2009.
Inflation is forecasted at 1.4% this year, and estimated to increase to 1.8% in 2021–2022.
The economic growth forecast is 1.8% in 2021–2022, 1.5% in 2022–2023, and 1.3% in 2023–2024.
What do you make of the Budget 2020? Comment below.