Red diesel relief and other key points from the 2020 Budget

There was a sense of relief across the farming community, after Rishi Sunak announced he would not be scrapping the red diesel duty relief for agriculture.

While the red diesel exemption will be removed for some sectors in two years’ time, it will remain for agriculture, Mr Sunak announced, citing lobbying from the NFU as key to his decision.

NFU President Minette Batters said: “This is absolutely crucial and we are pleased to see the Chancellor has acknowledged our concerns. Red diesel is the primary fuel to run the majority of agricultural machinery and it is incredibly important for the farm businesses that produce the nation’s high quality and affordable food.”

Coronavirus

Mr Sunak announced a £30 million package to help businesses survive the economic effects of the coronavirus outbreak, including:

• Statutory sick pay for ‘all those who are advised to self-isolate’ even if they have not displayed symptoms
• The government to meet costs for businesses with fewer than 250 employees of providing statutory sick pay to those off work due to coronavirus
• Business rates for some sectors, including shops and restaurants in England with a rateable value below £51,000 suspended for a year
• A temporary coronavirus business interruption loan scheme for banks to offer loans of up to £1.2m to support small and medium-sized businesses.

Infrastructure

The budget also delivered a big increase in Government spending for infrastructure, including for flood defences and rural roads.

Mr Sunak confirmed that £5.2 billion would be made available for flood defences from April 2021 until 2026 – up from £2.6bn in the five-year period from 2015.

R&D

The Government’s R&D spend will increase to £22bn. NPA senior policy adviser Ed Barker noted that the government ‘will invest £1.4 billion over 10 years in the animal health science infrastructure at Weybridge, enhancing the UK’s science capability whilst protecting the nation from the increasing threats of current and emerging animal diseases’.

Structures and Buildings allowance

The Structures and Buildings Allowance (SBA) allows the cost of qualifying expenditure, which includes new and renovated non-residential structures and buildings, and infrastructure such as fencing, bridges and tunnels, to be written off against tax.

The Allowance, which was introduced in 2018, has been increased to 3%, so allowing investment to be written off over 33 years rather than the previous 50 years.  "This is a small but welcome change and may encourage more rural businesses to invest in buildings and infrastructure," Strutt and Parker said.

Other announcements

Other notable announcements include:

• Abolishing small business rates geared for on farm diversification
• Reducing entrepreneurs relief to £1m from £10m
• Raising the National Insurance threshold in April to £9,500 from £8,632, saving the typical employee over £100.
• £5bn to be spent on getting gigabit-capable broadband into the hardest-to-reach places