Spring 2020

A new world – managing the Covid-19 pandemic

The spread of the Covid-19 coronavirus has changed the outlook for everyone and stymied the world economy.

The Budget on 11 March was overshadowed by the mounting impact of the virus. The Chancellor has already announced two rounds of measures which together dwarf the £12 billion expenditure promised in the Budget. The running figure (as at 20 March) now totals over £60 billion with a further £330 billion of loan guarantees for businesses, large and small. Mr Sunak’s actions include:

■ A subsidy to employers of 80% of furloughed workers’ wage costs, up to a cap of £2,500 per month, to encourage the retention of employees who might otherwise be laid off .

■ Waiving 2020/21 business rates for all businesses in the retail, leisure and hospitality sectors.

■ Providing grants of up to £25,000 for businesses that qualify for the Business Rates Retail Discount.

■ Delaying the introduction of private sector off-payroll working rules (IR35) for a year to April 2021.

■ Deferring the next quarterly VAT instalment to the end of the financial year plus, for the self-employed, the July self-assessment payment until January 2021.

Market volatility has rocked many formerly solid sectors, but this is not a repeat of 2008. The government has made sure that the banks are in a much stronger financial position than they were at that time. What Covid-19 represents is a left field shock to the entire global economy that looks certain to lead to a recession. If there is a lesson to learn from 2008, it is that markets can overreact and, although it seems impossible at the time, economies do recover. For now, the focus is on people, their lives and livelihoods.

✢ Levels and bases of taxation and tax reliefs are subject to change and their value depends on individual circumstances. The Financial Conduct Authority does not regulate tax advice. Tax laws can change.

In this issue:

» Lessons from five years of pensions flexibility

» Shifts in the savings landscape

» The 40% overdraft challenge

» Budget 2020 – a Budget for strange days

» National Living Wage vs the new State Pension

» Too generous by half?

» Overcoming the gender pensions gap

» Key capital