Chancellor hands out series of tax perks

The Chancellor made a series of headline grabbing announcements in his budget when it came to taxation.

Tax on alcohol and fuel has been frozen and the National Insurance threshold has been raised from £8,632 to £9,500 next month.

Rishi Sunak said: “I’m announcing today £1m of support for promoting Scottish food and drink overseas and £10m of new R&D funding to help distilleries go green.”

“And to further support the industry, I can also announce that this year the planned increase in spirits duty will be cancelled.”

“I can announce that, exceptionally, for this year, the business rates discount for pubs will not be £1,000 – it will be £5,000. And I’m also pleased to announce that the planned rise in beer duty will also be cancelled.”

“And because of decisions I’ve taken elsewhere in the Budget, I am also freezing duties for cider and wine drinkers as well.

“For only the second time in almost 20 years, that’s every single one of our alcohol duties frozen.”

He added: “I have heard representations that after nine years of being frozen, at a cost of £110bn to the taxpayer, we can no longer afford to freeze fuel duty.

“I’m certainly mindful of the fiscal cost and the environmental impacts.

“But I’m taking considerable steps in this Budget to incentivise cleaner forms of transport. And many working people still rely on their cars. So I’m pleased to announce today that, for another year, fuel duty will remain frozen.”

Speaking about the changes to National Insurance he said: “That’s a tax cut for 31 million people, saving a typical employee £104.”

The chancellor resisted calls to get rid of the much criticised Entrepreneurs Relief Fund.

Instead of axing the tax relief the threshold has been reduced from £10m to £1m.

The tax beak was seen as being over expensive and not broad enough and calls to axe were led by the Federation of Small Business.

Jay Boyce, partner at MHA MacIntyre Hudson, said: “I expected some reform of Entrepreneur’s Relief as some had been accused of abusing the system. This is a measure that is sure to go down well with trade bodies such as the Federation of Small Businesses.

“With the change in the relief, I also expect to see the number of businesses sold to employees increase.”

In a surprise announcement this morning and in advance of today’s Budget, the Bank of England cut base rates from 0.75% to 0.25% taking borrowing costs down to the lowest level in history.

Boyce added: “It appears that the Bank have done this hand in hand with the Chancellor so as support business and the economy in general through the impending economic crisis caused by the corona virus outbreak.

 “The reduction in rates will help the banks free up billions in extra lending to support business as the health crisis starts to have a real impact on business. It is hoped that, along with measures to be announced by the Chancellor, this step will mitigate the overall impact of the virus outbreak on the economy in coming months.”