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12 Mar 2020

Budget 2020: what was in the small print?

We read the Budget books so you don't have to

Chancellor of the Exchequer Rishi Sunak has delivered the 2020 Budget speech, making headlines for pledges on coronavirus and National Insurance tax changes. But what wasn't in the speech?

There's more to the Budget than the Chancellor's words to the House of Commons.

The Treasury releases a printed 'red book' alongside each Budget speech - this year with the subtitle 'Delivering on our promises to the British people'.

Another large document - the Overview of Tax Legislation and Rates, also known as the OOTLAR - was released on Budget day too. Much of it is made up of tables, dates, numbers and other acronyms (although none are as fun as OOTLAR).

These documents, more than 300 hundred pages between them, are filled with announcements and changes that, for whatever reason, didn't make it into the Chancellor's speech.

Here, Which? takes a fine-tooth comb to the small print of both these documents to tell you what you need to know about the 2020 Budget that the Chancellor didn't say out loud.

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Access to cash legislation

At the end of February, thousands of people joined Which? in calling on the government to protect access to cash in law.

The red book confirms that this campaign has made a difference, with the government promising to bring forward legislation to protect cash for those who need it. 'This will ensure the industry continues to meet the changing needs of cash users,' it says.

The detail of what the legislation will include is yet to be ironed out, but discussions are due to take place between the Treasury, industry and regulators to discuss further.

Anabel Hoult, Which? CEO, said: 'We are pleased that the Chancellor has taken decisive action today to ensure that millions of people who have been hit hard by bank branch and ATM closures will continue to have access to cash.

'We know that the cash system faces irreversible damage within the next two years, so the government must swiftly press ahead with its plans to legislate, which must include putting a single regulator in charge of protecting cash. It is vital that this commitment is quickly turned into action.

'We look forward to working with the government, regulators and industry to ensure that cash is protected for as long as it is needed.'

State pension increase

From 6 April 2020, the state pension will rise by 3.9% to £175.20 a week. That means new state pensioners - who reached pension age on or after April 2016 - will be £343.20 better off by the end of the 2020-21 tax year.

The basic state pension for people who retired before April 2016 will also increase this April. Basic state pensioners will be £262.60 better off per year.

Inheritance tax threshold increased

The rate of inheritance tax will stay at 40%, but in 2020-21 individuals will be able to pass on £175,000-worth of tax-free property, up from £150,000 in the current tax year.

Individuals can already pass on £325,000 of their estate tax-free. The £175,000 will be allowed in addition to this for homes left to descendants.

Overall, this means the inheritance tax threshold will rise to £500,000 from April, or £1m for married couples.

Only 5% of estates pay inheritance tax, according to HMRC, so it's very unlikely you'll be affected by this change.

Capital gains tax allowance rises

The capital gains tax (CGT) allowance will increase from £12,000 to £12,300 for the next tax year.

This means you can make £12,300 on selling your possessions, such as antiques, shares or property, before you pay tax on them.

The Budget has also cut the payment window for CGT to 30 days after selling. Currently, you have between nine and 18 months.

Hospital parking fee exemptions

Car parking fees at hospitals in England will be scrapped for 'those in greatest need'. This includes:

  • patients with disabilities and their families
  • patients with terminal illnesses and their families
  • patients with regular appointments
  • parents of sick children staying overnight
  • NHS staff working night shifts

Hear our experts discuss the Budget on this week's Which? Money Podcast:

Social care funding

Measures to tackle the social care crisis were notably absent from Mr Sunak's speech. Instead, he promised to tackle the issue 'over the next few months', but provided no detail.

The red book did have a little more information. The £1bn additional funding for social care announced in 2019 will continue every year 'to stabilise the system', and a cross-party consultation on social care reform has been launched.

Updates to tax-free childcare

The government's tax-free childcare scheme currently pays working parents 25% based on their childcare costs, up to a maximum of £2,000 a year.

The scheme was launched in 2017 but, according to the government's own figures, only 8% of eligible families had signed up by June last year.

In an attempt to make it easier to claim, the government will now let parents who pay for school-related costs via digital platforms link these platforms to their tax-free childcare accounts.

Junior Isas and child benefit

The limit for junior Isas - tax-free savings accounts for under-18s - will be more than doubled to £9,000.

The chart below shows how junior Isa limits have changed over the years. As you can see, the jump this year was significantly bigger than most years.

Child benefit will also increase, rising from £20.70 a week to £21.05 in line with inflation.

Self-employed mortgage help

The government says it will try to improve the guidance for would-be homebuyers who are self-employed.

There are also plans to improve their access to finance and credit, which would probably include mortgages.

Since proof of income often plays an important part in lenders' mortgage eligibility checks, getting a mortgage can be more difficult if you're self-employed.

Homeworking flat rate deduction increased

Currently, self-employed people working from home can claim an income tax deduction of £4 a week for additional household expenses.This will rise to £6 a week from April 2020.

Tax allowance changes

The income limit for married couple's allowance - which couples can claim as long as one partner was born before 6 April 1935 - has increased by £600 from £29,600 to £30,200.

The maximum amount you can claim has also been boosted from £8,915 to £9,075 a year.

Marriage allowance, for couples born after 1935, has stayed the same at £1,250.

The blind person's allowance has risen by £50, from £2,450 to £2,500.

Crackdown on fly-tipping

In the red book's Waste and Recycling section, the government announced a digital waste tracking system and £2m to improve evidence of where fly-tipping happens and how to deter it most effectively.

  • Find the red book and the OOTLAR here if you'd like to read them yourself.