Following the UK’s departure from the EU, Chancellor Rishi Sunak presented the 2020 Budget against a backdrop of economic uncertainty.
Our Budget Summary provides an overview of the key announcements arising from the Chancellor’s speech. However, it also looks beyond the headlines and offers details on the less-publicised changes that are most likely to have an impact upon your business and your personal finances.
Additionally, throughout the Summary you will find informative comments to help you assess the effect that the proposed changes may have on your business and you personally.
I would specifically draw your attention to the following;
- The maximum Employment Allowance is increasing from £3,000 to £4,000 for eligible employers. From 2020/21 this allowance requires to be claimed. I can confirm that if Drummond Laurie run your payroll then this claim will be made by us and no action is required by our client.
- The National Insurance threshold will increase to £9,500, effectively giving the vast majority of employees an increase in their take-home pay of £2 per week. Again, this will be automatically applied through the payroll operation and no action is required by our clients.
- The increase in the National Minimum Wage rates has been confirmed for 2020/21. This confirms a significant increase of 6.2% with the NMW for workers over 25 years old rising to £8.72 per hour. Again, for those clients where Drummond Laurie run your payroll, these increases will be made as a matter of course and no action is required by you.
- Finally, the Chancellor has announced significant change to the operation of Statutory Sick Pay [SSP]. SSP is normally payable only after the first 3 days of sickness. It will now be payable from day 1 of sickness. Further, SSP is normally an “Employer Cost”, i.e. it is funded by the Employer. As announced yesterday, the Government will fully refund employers (with less than 250 employees) for SSP paid for up to 2 weeks per employee where the absence is as a result of COVID-19. We understand that this will operate on a “Claim Back” basis. As such, Employers should maintain a record of staff absences and SSP paid to allow this reclaim to take place in due course.
The Drummond Laurie summary of the Chancellor’s 2020 Budget is now available via this link on our website Budget Statement – Read Now
If you would like more detailed, one-to-one advice on any of the issues raised in the Chancellor’s Budget speech, please do get in touch with your normal Drummond Laurie adviser.
David Wheeler, Partner