It will take forward schemes such • dualling the A66 Trans-Pennine and upgrading the A46 Newark bypass, addressing congestion on these key routes in the North East and the Midlands • improving the M60 Simister Island in Manchester to tackle delays • building the Lower Thames Crossing, which will increase road capacity across the Thames • building a new, high-quality dual carriageway and a two-mile tunnel in the South West to speed up journeys on the A303, and to remove traffic from the iconic setting • considering how the A1/A19 north of Newcastle and the A1 Doncaster to Darrington in Yorkshire can be improved to speed up journeys and boost economic growth • exploring how to connect communities in East Lancashire and West Yorkshire better, and exploring the case for improvements to links between the M4 and the Dorset Coast 2.83 Midlands Rail Hub – The government is investing £20 million to develop the Midlands Rail Hub, progressing plans for a major programme of improvements to rail services between the 2.84 Transforming Cities Fund – The Budget allocates over £1 billion from the Transforming Cities Fund. This will deliver a range of schemes by 2022-23, 5 ‘Departmental update’, Department for Transport, October 2019. 6 ‘Lower Thames Crossing’, Highways England. • £79 million for Bournemouth, Christchurch & Poole, including four new cycle freeways and new bus priority infrastructure • £161 million for Derby & Nottingham, including over £25 million for bus rapid transit in Derby and over £10 million for a new cycle route between Nottingham, Derby and East • £33 million for Leicester, including £8 million for the development of a sustainable transport corridor from St Margaret’s to Birstall • £198 million for the North East, including £95 million for frequency and reliability improvements across the Tyne and Wear Metro system and to complement the government’s recent £337 million investment in new rolling stock • £51 million for Plymouth, including £36 million for an iconic new Central Park cycling and • £40 million for Preston City Region, including £25 million for a new station at Cottam Parkway on the Preston-Blackpool line • £166 million for Sheffield City Region, including a new Bus Rapid Transit link in Barnsley and a new tram stop on the Tram-Train line to Rotherham at Magna • £57 million for Southampton, including new Rapid Bus links • £317 million for West Yorkshire, including £39.9 million for Halifax delivering a new bus station, improved rail station and other improvements to complement the revitalisation of the town centre and £30 million for active and sustainable travel across Bradford • a further £117 million for Portsmouth City Region, Norwich and Stoke-on-Trent subject to further business case approval, which could fund a range of projects, including a multi-modal transport hub at Stoke-on-Trent station 2.85 Intra-city transport settlements – The government is investing £4.2 billion in the transport networks of eight city regions across England from 2022-23. Funding will be delivered through five-year, consolidated transport settlements agreed with central government and based on plans put forward by Mayors. Following the approach that has worked for London, these settlements will be published once they have been agreed, providing transparency and accountability while giving Mayors the flexibility and certainty to deliver their plans. As a first step, the government will open discussions with Greater Manchester, Liverpool City Region and West Midlands in the coming months. The new West Yorkshire Combined Authority, Sheffield City Region, Tyne and Wear, West of England and Tees Valley will also receive settlements, subject to putting in place appropriate governance to agree and deliver funding, including an elected Mayor for their city regions and transport networks. Resource funding to support the city regions with planning and delivery of these settlements will be set out at the CSR. 2.86 Local road upgrades – The Budget announces the second round of successful Major Road Network and Large Local Major schemes proceeding to the next stage of development. • junction improvements to the A12 East of Ipswich • improving the A350 at Junction 17 of the M4 • a single carriageway bypass on the A39 Atlantic Highway • junction improvements to the A426/A4071 Avon Mill/Hunters Lane, and a short dual

• a link road from Chesterfield town centre to the A6192 and A619 at Staveley • carriageway dualling and roundabout improvements on the A12 in Woodbridge • junction improvements on the A127 growth corridor • capacity enhancement on the A326 • alleviating congestion pinch points through the villages of Walton and Ashcott on the A39 • junction improvements at the Army and Navy roundabout near the centre of Chelmsford • refurbishment of the flyover structure carrying the A232 in Croydon • improving the Ely to Cambridge A10 Junction • refurbishment to the Hope and Anchor flyover which carries the A316 Twickenham Road • upgrades to M5 Junction 9 and a bypass on the A46 Ashchurch 2.87 Potholes fund – The government is announcing £500 million per year from 2020-21 to 2024-25 to help tackle potholes and to stop them from forming. As a result, the government will spend £1.5 billion in 2020-21 on filling in potholes and resurfacing roads. 2.88 Station accessibility funding – The government will invest £50 million to improve accessibility at 12 stations, including Newtown in Powys, Beeston in Nottinghamshire, Eaglescliffe in County Durham, and Walkden in Greater Manchester. This will expand the programme of station upgrades being undertaken through the Department for Transport’s 2.89 Changing Places Fund – The government is determined to see greater provision of Changing Places toilet facilities in new and existing buildings. These facilities are designed to provide sufficient space and equipment for people who are not able to use the toilet independently. Following on from a consultation in 2019, the government will change building regulations guidance by the end of this year to mandate the provision of Changing Places toilets in new public buildings.
The Budget also confirms that the government will launch a £30 million Changing Places Fund, working with the Changing Places Consortium and others to identify those sectors where we most need to accelerate the provision of such facilities in 2.90 Local transport supply chain study – The CSR will set out further plans for investment in local transport spending. To inform these plans, the Infrastructure and Projects Authority will, working with departments, lead a study into supply chain capacity in order to assess how industry can best deliver the government’s ambitious plans. 2.91 Affordable Homes Programme – The Budget announces an additional £9.5 billion for the Affordable Homes Programme. In total, the programme will allocate £12.2 billion of grant funding from 2021-22 to build affordable homes across England. This should bring in a further £38 billion in public and private investment. This new five-year programme will help more people into homeownership and help those most at risk of homelessness. 2.92 Housing infrastructure allocations – The Budget confirms allocations from the Housing Infrastructure Fund totalling £1.1 billion for nine different areas, including Manchester, South Sunderland and South Lancaster. These successful bids will unlock up to 69,620 homes

and will help to stimulate housing and infrastructure growth across the country. The Budget also announces additional housing investments in York Central, Harlow and North Warwickshire 2.93 Single Housing Infrastructure Fund – At the CSR, the government will launch a new long-term Single Housing Infrastructure Fund to unlock new homes in areas of high demand across the country by funding the provision of strategic infrastructure and assembling land 2.94 Brownfield Housing Fund – To level up all regions of the country, the Budget launches a new £400 million brownfield fund for pro-development councils and ambitious Mayoral Combined Authorities with the aim of creating more homes by bringing more brownfield land into development. The government will shortly invite bids that are ambitious and represent a significant increase in housing supply on brownfield land. The government will consider proposals from areas such as the West Midlands Combined Authority to expand their existing 2.95 Future Homes Standard – The government is committed to reducing emissions from homes and to helping keep household energy costs low now and in the future. In due course, the government will announce plans to improve the standards of new built homes. 2.96 Building Safety Fund – Following the Grenfell tragedy, one of the government’s most important objectives is to ensure residents feel safe and secure in their home. Having taken expert advice, the Budget confirms an additional £1 billion to remove unsafe cladding from residential buildings above 18 meters to ensure people feel safe in their homes. (32) 2.97 HM Land Registry (HMLR) – HMLR will be provided with £392 million to transition from a Trading Fund into part of central government. This funding includes £350 million that will be offset by HMLR returning its income to the Exchequer, and £42 million of funding to allow HMLR to continue with its ongoing project to digitise land registration in England and Wales, and enable further innovation in the property market and the wider UK economy. 2.98 Flood defences – Starting in 2021, the government will invest £5.2 billion in a six-year capital investment programme for flood defences. This investment will better protect 336,000 2.99 Place-based resilience schemes – The government is confirming a new £200 million package of place-based resilience schemes to ensure faster recovery for rural, urban and coastal communities most at risk of flooding. 2.100 Winter flood defence fund – The government will provide £120 million to repair flood defences which were damaged in the floods in winter 2019-20. 2.101 Water management assets – The government will invest £39 million in the Environment Agency’s network of water supply and water navigation assets. This investment will help provide upfront funding for asset repairs, which will ensure that waterways remain open and navigable, while contributing to flood and drought mitigation. Decarbonising power, industry and heat 2.102 Energy Innovation Programme – The government will at least double the size of the Energy Innovation Programme, with exact budgets to be decided at the CSR. 2.103 Carbon Capture and Storage (CCS) – The government will establish CCS in at least two UK sites, one by the mid-2020s, a second by 2030. This will be supported by the creation of a new CCS Infrastructure Fund of at least £800 million, with budgets to be finalised at the CSR. 2.104 Support for at least one CCS power station by 2030 – Using consumer subsidies, the government will support the construction of the UK’s first privately financed gas CCS 2.105 Green Gas Levy – The government will consult on introducing levy-funded support for biomethane production to increase the proportion of green gas in the grid. 2.106 Low carbon heat support – The government will consult on introducing a new grant scheme from April 2022 to help households and small businesses invest in heat pumps and biomass boilers, backed by £100 million of new Exchequer funding. 2.107 The Renewable Heat Incentive (RHI) – The government will extend the Domestic RHI in Great Britain until 31 March 2022. It will also introduce a new allocation of flexible tariff guarantees to the Non-Domestic RHI in Great Britain in March 2021, helping to provide investment certainty for the larger and more cost-effective renewable heat projects. (37) 2.108 Heat Networks – The Budget confirms £96 million for the final year of the Heat Networks Investment Project, which ends in March 2022. After this, the government will invest a further £270 million in a new Green Heat Networks Scheme, enabling new and existing heat networks to be low carbon and connect to waste heat that would otherwise be released into 2.109 Net zero policy development – The government is allocating an additional £10 million in 2020-21 to support the design and delivery of net zero policies and programmes.
2.110 Electric vehicle charging infrastructure investment and review – The government will provide £500 million over the next five years for electric vehicle charging infrastructure. This will include a Rapid Charging Fund to help businesses with the costs of connecting high-powered charge points to the electricity grid, where those costs would prevent private sector investment. To target spending from this fund effectively, the Office for Low Emission Vehicles will complete a comprehensive review of electric vehicle charging infrastructure. This will build on the previous review announced in July 2019, extending its scope to cover the full Strategic Road Network and other strategic locations in cities and rural areas. 2.111 Consumer incentives for the purchase of ultra-low emission vehicles – The government is considering the long-term future of consumer incentives to support the transition to zero emission vehicles alongside the consultation on bringing forward the phase-out date for the sale of new petrol and diesel cars and vans from 2040. In the meantime, the government will provide £403 million for the Plug-in Car Grant, extending it to 2022-23. The government will also provide £129.5 million to extend the Plug-in Van Grant, Plug-in Taxi Grant, and Plug-in Motorcycle Grant to 2022-3. (35) 2.112 Air quality – The government will provide an additional £304 million to reduce nitrogen dioxide emissions. This brings the total funding provided for local authorities to deliver their air quality plans to £880 million. (36)

2.113 Nature for Climate Fund – The government will invest £640 million in afforestation and peatland restoration in England, delivering more than a 600% increase in current tree 2.114 Nature Recovery Network Fund – The government will invest up to £25 million in England to partner with landowners, businesses, and local communities in the creation of Nature Recovery Areas. These will deliver habitat and species restoration and recovery, alongside wider natural capital benefits. 2.115 Natural Environment Impact Fund – The government will commit up to £10 million to stimulate private investment and market-based mechanisms to improve and safeguard 2.116 Darwin Plus expansion – The government will triple the Darwin Plus programme to £10 million per year to support the conservation of the UK Overseas Territories’ unique and globally significant biodiversity and help protect and enhance their natural environments.8 2.117 Extended Producer Responsibility – The government will commit £700,000 to develop IT capability to administer the future Extended Producer Responsibility scheme 2.118 Digital waste tracking – The government will invest £7.2 million in a national system to enable the smart tracking of waste movements across the economy. 2.119 Tackling fly-tipping – The government will launch a £2 million fund to support innovative approaches to tackling fly-tipping. 2.120 English Devolution White Paper – The government will publish an English Devolution White Paper in the summer, setting out how it intends to meet its ambitions for full devolution 2.121 Local Growth Fund – Decisions on the future of the Local Growth Fund will be made at the CSR. In advance of this, the Budget confirms up to £387 million in 2021-22 to provide certainty for local areas that they will be able to continue with existing priority Local Growth Fund projects that require funding beyond this year. 2.122 West Midlands local growth funding – The government is devolving over £160 million from the Local Growth Fund to West Midlands Combined Authority to accelerate progress on the Eastside Metro extension and phase one of the Sprint bus rapid transit network. 2.123 West Yorkshire devolution deal – The government has agreed a devolution deal with West Yorkshire to establish a Mayoral Combined Authority with a directly-elected Mayor from May 2021. This deal will provide £1.1 billion of investment for the area over 30 years, as well as devolving significant new powers to the area on transport, planning and skills. The deal also underpins the agreement of a long-term intra-city transport settlement for the region starting in 2022-23. Alongside this the government is providing up to £500,000 to support Bradford to develop plans that would maximise the benefits of potential Northern Powerhouse 7 ‘Provisional Woodland Statistics’, Forestry Research, June 2019. 8 ‘Darwin Plus Projects Register’, Darwin Initiative, March 2020. 2.124 British Library at Leeds and Boston Spa – The Budget makes available up to £95 million for the British Library site at Boston Spa. This investment will underpin the Library’s plans to open a major new site in the centre of Leeds, creating a new British Library of the North. The government will provide a £25 million Heritage Fund to the West Yorkshire Combined Authority to support the Library in establishing this new site. 2.125 UK Shared Prosperity Fund (UKSPF) – The UKSPF will replace the overly-bureaucratic EU structural funds, levelling up opportunity in each of the four nations of the country. Funding will be realigned to match domestic priorities, with a focus on investing in people. It will, at a minimum, match current levels of funding to each nation from EU structural funds. The government will set out further plans for the Fund including at the CSR. 2.126 Commonwealth Games trade and investment programme – The Budget allocates £21.3 million for the Birmingham 2022 Commonwealth Games Trade, Tourism, and Investment Programme to take full advantage of the economic legacy for the West Midlands and the country as a whole from this exciting sporting event. 2.127 Changing where the government makes decisions – The government will relocate a minimum of 22,000 civil service roles out of central London, the vast majority to the other regions and nations of the UK. This will take place over the next decade via the Cabinet Office and its Places for Growth programme. HM Treasury, alongside DIT, BEIS and MHCLG, will establish a new economic decision-making policy campus of over 750 roles in the north of England. HM Treasury will also establish representation in Northern Ireland and Wales, adding to its existing presence in Scotland.
2.128 The government has designated the corridor of land connecting Oxford, Milton Keynes, Bedford and Cambridge (the OxCam Arc) as a key economic priority. Earlier this year, the government announced the East West Rail Company’s preferred route for the new line between Bedford and Cambridge. The government will also, subject to planning consents, build a new rail station at Cambridge South, improving connectivity to the world-leading research facilities of the Cambridge Biomedical Campus – the largest cluster of medical and life sciences research 2.129 The Budget announces plans to develop, with local partners, a long-term Spatial Framework to support strategic planning in the OxCam Arc. This will support the area’s future economic success and the delivery of the new homes required by this growth up to 2050 and beyond. The government is also going to examine and develop the case for up to four new Development Corporations in the OxCam Arc at Bedford, St Neots/Sandy, Cambourne and Cambridge, which includes plans to explore the case for a New Town at Cambridge, to accelerate new housing and infrastructure development. Scotland, Wales, and Northern Ireland 2.130 Scotland, Wales and Northern Ireland will receive significant funding through Barnett consequentials for the devolved administrations to deliver public services, infrastructure and other • the Scottish Government’s block grant will increase by over £640 million through to 2020-21 before adjustments for tax devolution • the Welsh Government’s block grant will increase by over £360 million through to 2020-21 before adjustments for tax devolution – this includes a 5% uplift in Barnett consequentials agreed as part of the Welsh Government’s fiscal framework in 2016

• the Northern Ireland Executive’s budget will increase by over £210 million through 2.131 Ofgem’s estates programme – The government will provide up to £2 million for Ofgem to secure new premises in Glasgow, increasing the number of staff operating outside 2.132 Funding allocations for remaining City and Growth Deals – The government will provide funding for four City and Growth Deals in Scotland, Wales and Northern • £25 million for Argyll and Bute • £126 million for Mid, South and West of Northern Ireland, and £36 million for Causeway 2.133 Support for the whisky industry – The government is expanding its support for the • freezing spirits duty for this year • allocating £10 million for R&D spending to help decarbonise UK distilleries, including the 2.134 In addition, the GREAT Britain and Northern Ireland campaign will fund a £1 million campaign to promote the Scottish food and drink sector. This will include additional trade promotion to increase awareness and change perceptions of Scottish food and drink exports, including Scotch whisky. It will also expand tourism promotion campaigns to reach new markets. 2.135 Western Gateway Independent Economic Review – The government will support the Western Gateway, a strategic economic partnership across south Wales and the west of England, to oversee an independent economic review to identify long-term economic opportunities and challenges for the region. 2.136 Support for Welsh language and broadcasting – To support TV station S4C, which provides viewers with content in the Welsh language, the government will legislate to enable S4C to recover any VAT it pays in full. New technologies and support for innovation 2.137 Step change in R&D investment – The government will increase investment in science, innovation and technology to £22 billion by 2024-25. 2.138 Leadership in key technologies – The government will invest over £900 million to ensure UK businesses are leading the way in high-potential technology and sectors, including nuclear fusion, space, electric vehicles, and life sciences. 2.139 High-risk research agency – The UK will invest at least £800 million in a new blue skies 2.140 Funding for world-leading research – The government will invest up to £400 million extra in 2020-21 to support world-leading research, infrastructure and equipment across 2.141 Mathematics research – The government will invest £300 million between 2020-21 and 2024-25. This will increase funding available for new PhDs, fellowships and

2.142 Specialist institutions – The government will invest £80 million to support the UK’s foremost specialist institutions. This includes organisations such as the London School of Hygiene and Tropical Medicine, the Royal College of Art and the Institute of Cancer Research, 2.143 Defence R&D – The government will invest an additional £100 million in Defence R&D. This will develop capabilities in response to threats facing the UK, including funding for cutting-edge technology in aviation and space propulsion. 2.144 National Security Strategic Investment Fund (NSSIF) – The government will provide an additional £50 million to the NSSIF . As well as investing in leading UK-based venture capital funds, the government will expand the NSSIF programme to make direct investments, alongside private sector co-investors, into companies with advanced technologies that can contribute to the UK’s longer term national and economic security. The British Business Bank will operate NSSIF direct investments through a new government company called British Technology 2.145 Animal health science estate – 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 2.146 Government science capability – To support cross-cutting strategic science capabilities, the government will provide an additional £2 million in 2020-21 to the Government Chief Scientific Adviser and the Government Office for Science. 2.147 Natural History Museum research facility – The Budget allocates £180 million capital funding for a new, state-of-the-art Collections, Research and Digitisation Centre for the Natural History Museum at Harwell Science, Technology and Innovation Campus in Oxfordshire. This new facility will be a world-leading centre for natural sciences research and international collaboration and will preserve this unique research collection for future generations. 2.148 Materials Processing Institute – The government will provide up to £22 million, subject to business case, to support research and innovation in the steel and metals sector through the Materials Processing Institute.
2.149 Life Sciences Investment Programme – The Budget provides the British Business Bank with £200 million for a new dedicated equity investment programme that, invested alongside private sector capital, is expected to enable £600 million of investment to support the UK’s best health and life science innovations. The programme will support large-scale venture growth funds investing in life sciences companies and it will launch within a year. 2.150 Making the most of knowledge assets – The public sector holds around £150 billion of knowledge assets (intellectual property, tech, data and other intangibles).9 The government wants to unlock more value from these assets and support innovation and productivity. The government will establish a fund to invest in innovative public sector ideas and a new unit to scout for and develop these opportunities. Public bodies are spread across the country and this support will help level-up regional innovation capability and networks outside of the South East. Further detail will be provided in a forthcoming report. 2.151 Better use of economic data – Improving methods for monitoring the economy has never been more important. The Budget announces a new fund of up to £5 million per year, to support the development of new economic data and its more innovative use. 9 ‘Measuring Intangible Capital in the Public Sector’ SPINTAN, December 2016

Enterprise and business support 2.152 Enhanced local business support – Supporting enterprise is an important part of the government’s ambition to level up regions across the UK. To ensure that all businesses have access to high quality support and advice in their region, the government (29) • invest £10 million to increase Growth Hub10 capacity and provide a high-quality, core business advice and guidance offer across all 38 Growth Hubs • invest £13 million to expand the British Library’s network of Business and Intellectual Property Centres to 21 cities and 18 surrounding local library networks, providing entrepreneurs with business support, free access to market intelligence, IP workshops and 2.153 SME productivity – Industry-led initiatives have a valuable role in supporting small businesses to improve their productivity. The government will invest up to an additional £5 million in Be the Business to expand its national productivity campaign and further develop its digital tools and resources. 2.154 Business support reform – The government will use the CSR to make it easier for businesses to access the information and support that is relevant for them. As a first step, BEIS will lead the development of a digital service to provide businesses with tailored information about appropriate sources of support. 2.155 Start-Up Loans – The government will extend the funding of the British Business Bank’s Start-Up Loans programme to the end of 2021-22, supporting up to 10,000 further entrepreneurs across the UK to access finance to start a business. The government will set out plans to expand the programme at the CSR. 2.156 Access to growth capital for innovative businesses – Since the 2017 Patient Capital Review, the government has announced substantial support for innovative businesses seeking access to long-term growth capital. To build on this, the Budget will provide the British Business Bank with the resources to make up to £200 million of additional investment in UK venture capital and growth finance in 2020-21. 2.157 Prompt payment – The government is continuing its efforts to ensure that small businesses are paid promptly. BEIS will shortly be publishing a consultation on the merits of strengthening the powers of the Small Business Commissioner (SBC), building on the success the SBC has had in resolving payment disputes. 2.158 Tax guidance for self-employed people – To make it easier for self-employed people to navigate the tax system, the government will launch new interactive online guidance for taxpayers with non-Pay As You Earn income this summer. 2.159 Mortgage guidance for self-employed people – The government will explore how to improve the guidance available for self-employed people applying for a mortgage. 2.160 Support for self-employed parents – The government will consider how to provide appropriate support to self-employed parents so that they can continue to run their businesses, as part of its wider review of Parental Pay and Leave. 2.161 Direct Payments to farmers – Last year the government announced £2.8 billion of funding for Direct Payments to farmers for 2020. This funding is spread over two financial years to provide flexibility for Defra and the devolved administrations, of which £2.7 billion falls in 10

2.162 Digital Trade Network – The Budget announces £8 million for DIT and DCMS to pilot a Digital Trade Network in the Asia Pacific region, helping innovative UK companies to access 2.163 UK Export Finance (UKEF) Direct Lending Facility – UKEF offer loans to buyers of UK goods and services, particularly in emerging markets, to encourage them to buy from the UK. This lending has been capped at £3 billion with an additional £2 billion provided at Budget 2018 for use in 2020-21 and 2021-22 only. The Budget announces that UKEF will permanently retain this additional capacity as well as have a new £2 billion lending facility for projects supporting clean growth and a new £1 billion facility to support overseas buyers of UK defence and security goods and services. 2.164 UKEF support for exporters – To provide improved support for exporters in energy transition and clean growth sectors, UKEF will enhance its face-to-face support in the North of England and Scotland where energy supply chains are economically important. 2.165 UKEF support for fixed rate finance – UKEF will update its terms to allow it to better support export finance on a fixed-rate basis across its full product range, allowing customers to benefit from certainty of financing costs. 2.166 Regional exports and investment – DIT will drive investment into and end-to-end support for exporters from the Northern Powerhouse, the Midlands Engine and the Western Gateway through dedicated local champions based at key overseas posts.
2.167 Advice for exporters – DIT will increase its capacity to support exporters focused on the Northern Powerhouse, the Midlands Engine and the South West by increasing the number of international trade advisers available to provide personalised support to exporters. 2.168 Enhanced market access support – DIT will increase its resource and capability to identify and address market access barriers preventing UK exporters from accessing 2.169 British Film Commission – The Budget allocates £4.8 million to expand the work of the British Film Commission to promote the UK as a destination of choice for studio space investment. The British Film Commission will act as a single source of expert advice for investors and developers and provide targeted support at the early stages of viable projects to facilitate increased provision of studio facilities across the UK. 2.170 Start-up and Innovator visas – DIT will become an endorsing body to allow it to directly support visa applications for eligible foreign investors seeking to start a business in 2.171 Technical amendment to the process of import duty variation – The government will legislate to amend section 15 of the Taxation (Cross-border Trade) Act 2018 by refining the criteria used to determine when the government may vary the amount of import duty in the context of an international trade dispute. This will allow the government to vary import duty where it considers this appropriate, having regard to relevant international agreements and obligations. The amendment will enable the UK to respond adequately to developments in the

2.172 Increasing National Insurance thresholds – The Budget confirms the government’s commitment to increase the thresholds at which employees and the self-employed start paying National Insurance contributions (NICs) to £9,500 from April 2020.11 Around 1.1 million people will be taken out of paying Class 1 and Class 4 NICs entirely.12 This is the first step in meeting the government’s ambition to increase these thresholds to £12,500, which would save a typical employee over £450 per year.13 (12) 2.173 Income tax and National Insurance exemptions for bursary payments to care leavers – The government will legislate in Finance Bill 2020 to introduce an income tax exemption for the bursary paid by the Education and Skills Funding Agency to care leavers aged 16 to 24 who start an apprenticeship. Corresponding legislation will be introduced to mirror the income tax exemption for NICs. This legislation will confirm HMRC’s current position that care leavers’ bursaries are tax exempt, including those paid prior to the 2020-21 tax year. 2.174 Increasing the flat rate deduction for homeworking – The government will increase the maximum flat rate income tax deduction available to employees to cover additional household expenses from £4 per week to £6 per week where they work at home under homeworking arrangements. This will take effect from April 2020. 2.175 Tax treatment of the Troubles Permanent Disablement Payment Scheme – The government will legislate in Finance Bill 2020 to introduce income tax, inheritance tax and capital gains tax exemptions for payments made on or after May 2020 under the Troubles Permanent Disablement Payment Scheme. 2.176 Tax treatment of social security benefits in Scotland – The government will legislate in Finance Bill 2020 to clarify the income tax treatment of three new social security payments. The legislation will confirm that the following three benefits introduced by the Scottish government are exempt from income Job Start; Disability Assistance for Children and Young People; and, the Scottish Child Payment. The legislation also includes a new power which permits the government to confirm by secondary legislation when new social security benefits introduced by the UK government or any of the devolved administrations will be tax exempt. The changes will take effect from April 2020. 2.177 Tax treatment of the Windrush Compensation Scheme – As announced in April 2019, the government will legislate in Finance Bill 2020 to introduce exemptions from income tax, inheritance tax and capital gains tax for payments made on or after 3 April 2019 under the Windrush Compensation Scheme. The legislation also includes a new power to exempt any necessary future compensation payments by statutory instrument from income tax, inheritance tax and capital gains tax, where appropriate. (64) 2.178 Review of changes to the off-payroll working rules (commonly known as IR35) – At Budget 2018 the government announced that it would reform the off-payroll working rules in the private and third sectors from April 2020. The government has recently concluded a review of the reform, and is making a number of changes to support its smooth and successful implementation. The government believes it is right to address the fundamental unfairness of the non-compliance with the existing rules, and the reform will therefore be legislated in Finance Bill 2020 and implemented on 6 April 2020, as previously announced. 11 ’31 million taxpayers to get April tax cut’, HM Treasury, 30 January 2020. 12 HMRC analysis based on Survey of Personal Incomes (SPI) 2017-18 data, and Budget 2020 OBR forecast. 13 HM Treasury analysis, see ‘Budget 2020 data sources’. 2.179 National Insurance holiday for employers of veterans in first year of civilian employment – To support the employment of veterans, the government is meeting the commitment to introduce a National Insurance holiday for employers of veterans in their first year of civilian employment. A full digital service will be available to employers from April 2022; however, transitional arrangements will be in place in the 2021-22 tax year which will effectively enable employers of veterans to claim this holiday from April 2021. The holiday will exempt employers from any NICs liability on the veteran’s salary up to the Upper Earnings Limit. The government will consult on the design of this relief. (16) 2.180 Tax treatment of welfare counselling provided by employers – The government will extend the scope of non-taxable counselling services to include related medical treatment, such as cognitive behavioural therapy, when provided to an employee as part of an employer’s welfare counselling services. The changes will take effect from April 2020.
2.181 Top Slicing Relief (TSR) on life insurance policy gains – Following a recent First-Tier Tribunal case, the government will legislate in Finance Bill 2020 to put beyond doubt the calculation of TSR by specifying how allowances and reliefs can be set against life insurance policy gains. This measure will apply to all relevant gains occurring on or after 2.182 Call for evidence on pension tax administration – Those earning around or below the level of the personal allowance and saving into a pension may benefit from a top-up on their pension savings equivalent to the basic rate of tax, even if they pay no tax. Whether they receive this top-up depends on how their pension scheme administers tax relief. The government has committed to reviewing options for addressing these differences and will shortly publish a call for evidence on pensions tax relief administration. 2.183 Tapered annual allowance for pensions – The pensions annual allowance is the maximum amount of tax-relieved pension savings that can be accrued in a year. For those on the highest incomes, the annual allowance tapers down from £40,000. HM Treasury has reviewed the tapered annual allowance and its impact on the NHS, as well as on public service delivery 2.184 To support the delivery of public services, particularly in the NHS, the two tapered annual allowance thresholds will each be raised by £90,000. This means that from 2020-21 the “threshold income” will be £200,000, so individuals with income below this level will not be affected by the tapered annual allowance, and the annual allowance will only begin to taper down for individuals who also have an “adjusted income” above £240,000. (7) 2.185 For those on the very highest incomes, the minimum level to which the annual allowance can taper down will reduce from £10,000 to £4,000 from April 2020. This reduction will only affect individuals with total income (including pension accrual) over £300,000. Proposals to offer greater pay in lieu of pensions for senior clinicians in the NHS pension scheme will not be 2.186 Lifetime allowance for pensions – The lifetime allowance, the maximum amount someone can accrue in a registered pension scheme in a tax-efficient manner over their lifetime, will increase in line with CPI for 2020-21, rising to £1,073,100. 2.187 Starting rate for savings tax band – The band of savings income that is subject to the 0% starting tax rate will remain at its current level of £5,000 for 2020-21. 2.188 Individual Savings Account (ISA) annual subscription limit – The adult ISA annual subscription limit for 2020-21 will remain unchanged at £20,000. (55) 2.189 Junior ISA and Child Trust Fund annual subscription limit – The annual subscription limit for Junior ISAs and Child Trust Funds will be increased from £4,368 to £9,000. 2.190 Increasing the Employment Allowance – The government will increase the Employment Allowance from £3,000 to £4,000 from April 2020. This will benefit around 510,000 businesses by reducing their costs of employment, with an average gain of £850 per year.14 The increase will take around 65,000 businesses out of paying NICs entirely and means the government will have doubled the value of the Employment Allowance in four 2.191 Business rates retail discount – The government has already announced that, for one year from 1 April 2020, the business rates retail discount for properties with a rateable value below £51,000 in England will increase from one third to 50% and will be expanded to include cinemas and music venues. To support small businesses in response to COVID-19 the retail discount will be increased to 100% and expanded to include hospitality and leisure businesses 2.192 Business rates pubs discount – The government previously committed to introducing a £1,000 business rates discount for pubs with a rateable value below £100,000 in England for one year from 1 April 2020. To further support pubs, in response to COVID-19 the discount for pubs will be increased to £5,000. (27) 2.193 Business rates local newspaper office space discount – The £1,500 business rates discount for office space used by local newspapers in England will be extended for an additional five years until 31 March 2025. 2.194 Business rates public lavatories relief – The government will bring forward legislation as soon as possible in this session to provide mandatory 100% business rates relief for standalone public lavatories in England from April 2020. 2.195 Local authorities will be fully compensated for the loss of income as a result of these 2.196 Business rates review – The government is launching a fundamental review of business rates to report in the autumn. The Terms of Reference for this review are published alongside this Budget and a call for evidence will be published in the spring. 14 HMRC analysis based on Pay As You Earn Real Time Information, the ONS Inter-Departmental Business Register and Open Geography Portal. 15 HMRC analysis based on Pay As You Earn Real Time Information, the ONS Inter-Departmental Business Register and Open Geography Portal. 2.197 Valuation Office Agency (VOA) business systems transformation programme – The government will invest an additional £11.5 million in the VOA in 2020-21 to support the modernisation of VOA systems and processes, to increase efficiency and improve customer 2.198 Capital Structures and buildings allowance (SBA) rate – The annual rate of capital allowances available for qualifying investments to construct new, or renovate old, non-residential structures and buildings will increase from 2% to 3%. The change will take effect from 1 April 2020 for corporation tax and 6 April 2020 for income tax. The introduction of SBA at Budget 2018 greatly enhanced the international competitiveness of the UK’s tax system and this increased rate of relief goes even further, providing businesses who invest with over £1 billion in additional relief by the end of 2024-25.
(23) 2.199 Capital Gains Reduction in the Entrepreneurs’ Relief lifetime limit – From 11 March 2020, the lifetime limit on gains eligible for Entrepreneurs’ Relief (which offers a reduced 10% rate of Capital Gains Tax on qualifying disposals) will be reduced from £10 million to £1 million, in response to evidence that it has done little to incentivise entrepreneurial activity and that most of the benefit accrues to a small number of very affluent taxpayers.16 This will help ensure that the tax system is fair and sustainable while leaving over 80% of those using the relief 2.200 Review of Enterprise Management Incentives (EMI) scheme – The government will review the EMI scheme to ensure it provides support for high-growth companies to recruit and retain the best talent so they can scale up effectively, and examine whether more companies should be able to access the scheme. 2.201 Research & Development Expenditure Credit (RDEC) rate – The rate of RDEC will increase from 12% to 13% from 1 April 2020, supporting businesses investing in R&D and helping to drive innovation in the economy. (24) 2.202 Consultation on R&D tax credit qualifying costs – The government will consult on whether expenditure on data and cloud computing should qualify for R&D tax credits. 2.203 Preventing abuse of the R&D relief for small and medium-sized Summary of responses and consultation – Following consultation last year, the introduction of the PAYE cap on the payable tax credit in the SME R&D schemes will be delayed until 1 April 2021. The government has listened to industry and will also consult on changes to the cap’s design, to ensure it targets abusive behaviour as intended while ensuring that eligible businesses are able to access the relief. (60) 2.204 Corporation tax (CT) rate – Since 2010 the government has cut the headline rate of CT from 28% to 19%, giving the UK the lowest headline rate in the G20.18 To provide support for vital public services while maintaining the UK’s competitive rate of CT, the government will legislate to retain the current 19% rate in April 2020. (45) 2.205 Digital services tax (DST) – As announced at Budget 2018, the government will introduce a new 2% tax on the revenues certain digital businesses earn from 1 April 2020. This will ensure the amount of tax paid in the UK reflects the value these businesses derive from their interactions with, and the contributions of, an active user base. Legislation will require 16 Internal HMRC analysis of Entrepreneurs’ Relief data. 17 ‘Capital Gains Tax Entrepreneurs’ Behaviours and Motivations’, IFF Research, May 2017

businesses to pay the DST on an annual basis, consistent with the draft legislation published in July 2019. The government will continue to give consideration to how the legislation applies to marketplace delivery fees and whether that application is consistent with the policy rationale of the DST. The government remains committed to developing a multilateral solution to the challenges digitalisation has created for the corporate tax system and will repeal the DST once an appropriate global solution is in place. (50) 2.206 Intangibles reform – The government will legislate in Finance Bill 2020 to remove the pre-2002 exclusion from the Intangible Fixed Assets (IFA) regime to support UK investment in intellectual property and other intangible assets. This means tax relief for the cost of acquiring corporate intangible assets on or after 1 July 2020 will be provided under a single regime, subject to restrictions to prevent tax avoidance. (28) 2.207 Corporate capital loss restriction – As announced at Budget 2018, from 1 April 2020, the government will restrict the proportion of annual capital gains that can be relieved by brought-forward capital losses to 50%. This measure includes an allowance that gives companies unrestricted use of up to £5 million capital or income losses each year, meaning that 99% of companies will be unaffected.19 Following consultation on the detailed design of the rules,20 the government will also exclude certain companies in liquidation from the scope of the 2.208 Review of the UK funds regime – The government will undertake a review of the UK’s funds regime during 2020. This will cover direct and indirect tax, as well as relevant areas of regulation, with a view to considering the case for policy changes. The review will begin with a consultation, to be published at the Budget, on whether there are targeted and merited tax changes that could help to make the UK a more attractive location for companies used by funds to hold assets. The review will also consider the VAT treatment of fund management fees and other aspects of the UK’s funds regime. 2.209 Transfer of unlisted securities to connected companies for Stamp Duty and Stamp Duty Reserve Tax – In Finance Act 2018-19, the government introduced a targeted market value rule to prevent artificial reduction of the tax due on share acquisitions when listed shares are transferred to a connected company. This rule is being extended to unlisted shares in Finance Bill 2020 to prevent further tax avoidance. As part of this change, the government will amend legislation to prevent a double tax charge arising on certain company 2.210 Consultation on the tax impact of the withdrawal of the London Inter-Bank Offered Rate (LIBOR) – The government will consult to ensure that where tax legislation makes reference to LIBOR it continues to operate effectively. The consultation will also enable the government to ensure it is aware of all the significant tax issues that arise from the reform of 2.211 Consultation on aspects of the hybrid mismatch rules – The government will publish a consultation on the corporation tax rules that apply to hybrid mismatch arrangements that seek to exploit the differences in tax treatment between two jurisdictions. The consultation seeks to ensure that the hybrid mismatch rules work proportionately and as intended. 20 ‘Corporate Capital Loss consultation on delivery’, HM Treasury and HM Revenue & Customs, July 2019.
2.212 Non-UK resident Stamp Duty Land Tax (SDLT) surcharge – The government will introduce a 2% SDLT surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021. This will help to control house price inflation and to support UK residents to get onto and move up the housing ladder. The money raised from the surcharge will be used to help address rough sleeping. (47) 2.213 Housing Annual Tax on Enveloped Dwellings (ATED) and Stamp Duty Land Tax (SDLT) – To make the taxation of housing co-operatives fairer, the government will introduce a relief for qualifying housing co-operatives from the ATED and the 15% flat rates of SDLT on purchases of dwellings over £500,000. The SDLT relief in England and Northern Ireland will take effect from Autumn Budget 2020 and the UK-wide ATED relief from 1 April 2021 with a refund available for 2020-21. 2.214 Plastic Packaging Tax – As announced at Budget 2018 and following consultation in spring 2019,21 the government will introduce a new Plastic Packaging Tax from April 2022 to incentivise the use of recycled plastic in packaging. The Budget sets the rate at £200 per tonne of plastic packaging that contains less than 30% recycled plastic. This will apply to the production and importation of plastic packaging. The government will keep the level of the rate and threshold under review to ensure that the tax remains effective in increasing the use of recycled plastic. The government will also extend the scope of the tax to the importation of filled plastic packaging and apply a minimum threshold of 10 tonnes of plastic packaging to ensure the smallest businesses are not disproportionately impacted. The Budget also announces the launch of a further consultation on the detailed design and implementation of the tax, which includes consideration of an exemption for certain types of medical packaging. (38) 2.215 Aggregates Levy – The government will freeze the Aggregates Levy rate in 2020-21 and will be publishing a summary of responses and government next steps to last year’s comprehensive review of the levy. (52) 2.216 Increasing the gas rates under the Climate Change Levy (CCL) for years 2022-23 and 2023-24 – To meet the UK’s net zero commitment, the UK must continue to remove incentives to choose gas over electricity, which is a cleaner energy source. Building on the Budget 2016 announcement to make gas and electricity rates equal by 2025, the government is raising the rate on gas to £0.00568/kWh in 2022-23 and to £0.00672/kWh in 2023-24 whilst freezing the rates on electricity. To ensure the tax system treats fuels that are used off the gas grid more equitably, the government will freeze LPG at 2019-20 levels until 2.217 Extending the Climate Change Agreement (CCA) scheme – To support energy- intensive businesses to operate in a more environmentally sustainable way, the government will reopen and extend the CCA scheme by two years. The CCA scheme allows businesses to reduce their CCL bill in exchange for meeting targets to improve their energy efficiency. The terms of the extended scheme will be set out in a consultation to be launched shortly after Budget. As part of this, the government will simultaneously consult on long-term options for the CCA scheme. 2.218 Carbon price support (CPS) rate – The government will freeze the rate of the CPS at £18t/CO2e in 2021-22. Alongside wider carbon pricing policies, this will continue to encourage decarbonisation of the power sector. (43) 21 ‘Plastic packaging text’, HM Treasury, July 2019. 2.219 Carbon pricing after the transition period – The UK will continue to apply an ambitious carbon price from 1 January 2021 to support progress towards reaching net zero. The government will legislate at Finance Bill 2020 to prepare for a UK Emissions Trading System (ETS), which could be linked to the EU ETS. The government will also legislate for a carbon emissions tax as an alternative carbon pricing policy and consult on the design of a tax in 2.220 Fuel duty – The government will freeze fuel duty for a tenth year in a row, cumulatively saving the average car driver £1,200 compared to the pre-2010 escalator.22 Future fuel duty rates will be considered alongside measures that are needed to help meet the UK’s net 2.221 Air Passenger Duty (APD) rates – APD rates will increase in line with RPI for 2021-22, meaning that short haul rates remain frozen at £13, benefitting 80% of passengers.23 The rate for long haul economy will increase by £2, and the rates for those travelling in premium economy, business and first class will increase by £4. Those travelling long-haul by private jets will see the rate increase by £13. 2.222 Aviation tax reform – In January 2020 the government announced that it would undertake a review of APD ahead of the Budget to ensure that regional connectivity is supported while meeting the UK’s commitment to net zero emissions by 2050. As a result, the government will consult on aviation tax reform in spring 2020. The government will consider the case for changing the APD treatment for domestic flights, such as reintroducing a return leg exemption, and for increasing the number of international distance bands. 2.223 Vehicle Excise Duty (VED): Rates – The government will uprate VED rates for cars, vans and motorcycles in line with RPI from 1 April 2020. To support the haulage sector, the government will freeze HGV VED and the HGV Road User Levy for 2020-21. (53) 2.224 Zero emission vehicles (ZEVs) – From 1 April 2020, the government will exempt all ZEVs registered until 31 March 2025 from the VED ‘expensive car’ supplement. The measure will incentivise the uptake of ZEVs to support the phasing out of petrol and diesel vehicles. (44) 2.225 Motorhomes – From 12 March 2020, the government will reduce annual VED liabilities for most new motorhomes to a flat rate of £265, which will rise to £270 for 2020-21, when registering new motorhomes with the Driver and Vehicle Licensing Agency. From 1 April 2021, the government will align the VED treatment of new motorhomes and vans.
(18) 2.226 Call for evidence on VED – The government is publishing a call for evidence which will include how VED can be used to support the take-up of zero and ultra-low emission vehicles and reduce overall emissions from road vehicles. 2.227 Company car tax (CCT): Rates – As set out in July 2019,24 the government will reduce most CCT rates by 2% in 2020-21 for cars first registered from 6 April 2020. Rates will return to planned levels over the following two years, increasing by 1% in 2021-22 and 1% in 2022-23. Rates will then be frozen until 2024-25. (66) 23 HM Treasury calculations based on ‘Air Passenger Duty Bulletin’, HMRC, September 2019. 24 ‘Review of WLTP and vehicle summary of responses’, HM Treasury, July 2019. 2.228 Van benefit charge nil-rating for zero emission vans – From April 2021, the government will apply a nil rate of tax to zero-emission vans within van benefit charge. This measure will save businesses an estimated £433 per van in tax in 2021-22.25 2.229 Company vehicles – From 6 April 2020, fuel benefit charges and the van benefit charge will increase in line with CPI. (54) 2.230 First year allowances for business cars from April 2021 – To support the uptake of zero emission vehicles (ZEVs) and ultra-low emission vehicles (ULEVs), from April 2021, the government will extend first year allowances to ZEVs only and apply the main rate writing down allowance (WDA) of 18% to cars with emissions up to 50g/km. The special rate WDA of 6% will apply to higher polluting cars with emissions above 50g/km. First year allowances for zero emission goods vehicles and natural gas and hydrogen refuelling equipment will also be 2.231 Red Removing entitlement – The government will remove entitlement to the use of red diesel and rebated biofuels from April 2022, except for agriculture (including horticulture, pisciculture and forestry), rail and for non-commercial heating (including domestic heating). The government will consult on whether the entitlement to use red diesel and rebated biofuels is justified for any other users, for example there is a strong case for continued use by ferries carrying paid passengers on the UK’s rivers and inland waterways, or public entertainment. Commercial boats on open waters, including ferries and fishing boats, will remain entitled to the Marine Voyages Relief so will not have to pay more for their fuel. This measure will incentivise businesses to improve the energy efficiency of their vehicles and machinery or look for greener alternatives. To support the development of alternatives that these businesses can switch to, the Budget has also committed to at least doubling the size of the energy innovation programme, accelerating the design and production of innovative clean 2.232 Red Prohibition of use for propelling private pleasure craft – Private pleasure craft already pay the standard white diesel rate for propulsion. They will still be entitled to use red diesel for their heating use. Where they have one tank for propulsion and heating, the government will explore options that prevent them from having to pay a higher rate of duty on their heating use than they would otherwise have to pay. Details on the implementation of this power will be set out in due course. 2.233 VAT on e-publications – The Government will introduce legislation to apply a zero rate of VAT to e-publications from 1 December 2020, to make it clear that e-books, e-newspapers, e-magazines and academic e-journals there are entitled to the same VAT treatment as their 2.234 VAT Postponed Accounting – From 1 January 2021 postponed accounting for VAT will apply to all imports of goods, including from the EU. This will provide an important boost to those VAT registered UK businesses which are integrated in international supply chains as they adapt to the UK’s position as an independent trading nation. 2.235 Abolition of tampon tax – From 1 January 2021 the government will use freedom from EU law to enable a zero rate of VAT to be charged on women’s sanitary products. (17) 2.236 Long-term passengers’ policy consultation – The government is publishing a consultation alongside Budget to gather views on the potential approach to duty- and tax-free goods policy after the transition period following the UK’s departure from the EU. 25 HM Treasury analysis, see ‘Budget 2020 data sources’. 2.237 Long-term cross-border goods policy – The government will launch an informal consultation over spring 2020 on the VAT and excise treatment of goods crossing UK borders after the EU exit transition period. 2.238 VAT on fund management – As announced on 4 March 202026 the government is legislating to clarify when fund management services are exempt from VAT. 2.239 VAT on financial services – The government will set up an industry working group to review how financial services are treated for VAT purposes. 2.240 VAT Quick Fixes Directive – The government will introduce legislation to introduce simplified rules for the VAT treatment of intra-EU movements of call-off stock, allowing businesses to delay accounting for VAT until the goods are called-off. The legislation will apply to goods which are removed from a Member State on or after 1 January 2020 (sic). 2.241 VAT Partial Exemption – Following the recent call for evidence on the simplification of the VAT rules on Partial Exemption and the Capital Goods Scheme,27 the government will continue to engage with stakeholders in relation to their responses and will publish a response Alcohol, tobacco and other duties 2.242 Alcohol duty rates – Duty rates on beer, spirits, wine and cider will be frozen. (14) 2.243 Post-EU exit alcohol review – The government recognises the complexity of the current duty system and will review potential reforms to be implemented after the transition period, beginning by publishing a call for evidence by the summer. 2.244 Small Brewers’ Relief (SBR) – The government will publish the results of our review into Small Brewers Relief in the spring.
2.245 Tobacco duty rates – Duty rates on all tobacco products will increase by RPI + 2% until the end of this Parliament. The rate on hand-rolling tobacco will increase by RPI + 6% this year. These changes will take effect from 6pm on 11 March 2020. (48) 2.246 Gaming Duty – The government will legislate in Finance Bill 2020 to raise the Gross Gaming Yield (GGY) bandings for Gaming Duty in line with inflation. The revised bandings must be used for accounting periods starting on or after 1 April 2020. Avoidance, evasion and non-compliance 2.247 Since 2010 the government has secured and protected over £200 billion of tax that would have otherwise gone unpaid.28 The Budget builds on this work and announces further action to tackle tax avoidance, evasion and other forms of non-compliance that will raise an additional £4.7 billion between now and 2024-25. 2.248 Preventing the illicit trade of tobacco – The government is announcing increased resources for Trading Standards and HMRC to combat the illicit tobacco trade, including the creation of a UK-wide HMRC intelligence sharing hub. The government will also consult on proposals for stronger penalties for tobacco tax evasion. 26 ‘Value Added Tax (Finance) Order 2020’, UK Statutory Instruments, March 2020. 27 ‘Call for simplification of partial exemption and the Capital Goods Scheme’, HM Revenue & Customs, July 2019 28 ‘Annual Report and Accounts 2018-19, HMRC, August 2019; ‘Spring Statement 2019: Written Ministerial Statement’, HM Treasury, March 2019

2.249 Tackling Construction Industry Scheme (CIS) abuse – The government will legislate to prevent non-compliant businesses from using the CIS to claim tax refunds to which they are not entitled. The government is also publishing a consultation which introduces options on how to promote supply chain due diligence. (57) 2.250 Domestic reverse charge for building and construction services – As announced in September 2019,29 the implementation of the VAT domestic reverse charge for building and construction services, which prevents losses through so-called ‘missing trader’ fraud, will be delayed until 1 October 2020. (68) 2.251 VAT Agricultural Flat Rate Scheme (AFRS) – Following informal consultation with stakeholders in 2019 the government will introduce new entry and exit rules for the AFRS. 2.252 Hidden economy – The government will legislate in Finance Bill 2020-21 to make the renewal of licenses to drive taxis and private hire vehicles (PHVs, e.g. minicabs), operate PHV firms, and deal in scrap metal conditional on applicants completing checks that confirm they are appropriately registered for tax. This measure will make it more difficult for non-compliant traders to operate in the hidden economy and help level the playing field for the compliant majority. These changes will take effect in England and Wales in April 2022. The government is considering extending this reform to Scotland and Northern Ireland in the future and will work with the devolved administrations to this effect. (58) 2.253 Wider application – The government will publish a discussion document seeking views on the wider application of tax conditionality in the spring. Tax conditionality refers to a principle whereby businesses are granted access to government awards and authorisations (such as approvals, licenses, grants) only if they are able to demonstrate 2.254 Additional compliance resources for HMRC – The government is investing in additional compliance officers and new technology for HMRC. This investment is forecast to bring in £4.4 billion of additional tax revenue up to 2024-25 by enabling HMRC to further reduce the tax gap through additional compliance activity and expanding debt collection Response to the Loan Charge Review 2.255 Response to the independent Loan Charge Review – The Budget confirms the government’s response to Sir Amyas Morse’s Independent Loan Charge Review31 and sets out the Exchequer costs of accepting the recommendations. These will be legislated for in the forthcoming Finance Bill. To implement the changes, the government will also provide HMRC with additional operational funding. However, disguised remuneration schemes continue to be used. Therefore, the government will shortly issue a call for evidence on further action to stamp 2.256 Tackling promoters of tax avoidance – As announced in the government’s response to the independent Loan Charge Review,32 the government will legislate in Finance Bill 2020-21 to take further action against those who promote and market tax avoidance schemes. The legislation, which will take effect following Royal Assent, • allow HMRC to obtain information about the enabling of abusive schemes as soon as they are identified by strengthening information powers for HMRC’s existing regime to tackle enablers of tax avoidance schemes 29 ‘Revenue and Customs Brief 10 (2019): domestic reverse charge VAT for construction services – delay in implementation’, HM Revenue & Customs, 30 HM Treasury internal estimate using HMRC data. 31 ‘Disguised independent loan charge review’, HM Treasury and HM Revenue & Customs, December 2019. 32 ‘Disguised independent loan charge review’, HM Treasury and HM Revenue & Customs, December 2019. • ensure enabler penalties are felt without delay for multi-user schemes, meaning anyone enabling tax avoidance arrangements that are later defeated will face a penalty of 100% of • enable HMRC to act promptly where promoters fail to provide information on their avoidance schemes.
In particular, these changes will help HMRC obtain the information needed to bring a scheme into the Disclosure of Tax Avoidance Schemes regime and empower HMRC to act faster where avoidance schemes are being promoted • equip HMRC to more effectively stop promoters from marketing and selling avoidance • ensure promoters fulfil their obligations under the Promoters of Tax Avoidance Scheme (POTAS) regime, including where they have tried to abuse corporate structures to get • make further technical amendments to the POTAS regime, including preventing spurious legal challenges from disrupting the process of scrutinising promoters, so the regime can continue to operate effectively • make additional changes to the General Anti-Abuse Rule (GAAR) so it can be used as intended to tackle avoidance using partnership structures 2.257 HMRC’s promoter strategy – On top of the legislative changes the government will introduce in Finance Bill 2020-21, HMRC will publish a new ambitious strategy for tackling the promoters of tax avoidance schemes. This will outline the range of policy, operational and communications interventions both underway and in development to drive those who promote tax avoidance schemes out of the market, disrupt the supply chain to stop the spread of marketed tax avoidance, and deter taxpayers from taking up the schemes. 2.258 Raising standards in the market for tax advice – The government will publish a call for evidence in the spring on raising standards for tax advice. This will seek evidence about providers of tax advice, current standards upheld by tax advisers, and the effectiveness of the government’s efforts to support those standards, in order to give taxpayers more assurance that the advice they are receiving is reliable. 2.259 Future of Making Tax Digital – The government will publish an evaluation of the introduction of Making Tax Digital for VAT, along with related research. 2.260 Large business notification – From April 2021 large businesses will be required to notify HMRC when they take a tax position which HMRC is likely to challenge. This policy will draw on international accounting standards which many large businesses already follow. The government will consult shortly on the detail of the notification process. (56) 2.261 Protecting your taxes in insolvency – As announced at Budget 2018, the government will change the rules so that when a business enters insolvency, more of the taxes paid in good faith by its employees and customers and temporarily held in trust by the business go as intended to fund public services, rather than being distributed to other creditors. The Budget delays the commencement date of this measure from 6 April to 1 December 2020 and extends this measure to Northern Ireland. This reform will only apply to taxes collected and held by businesses on behalf of other taxpayers (VAT, PAYE income tax, employee NICs and CIS deductions). The rules will remain unchanged for taxes owed by businesses themselves, such as corporation tax and employer NICs. The legislation will be introduced in Finance Bill 2020. (65)

2.262 Clarifying the treatment of Limited Liability Partnership (LLP) returns – The government will legislate prospectively and retrospectively in Finance Bill 2020 to put beyond doubt that LLPs should be treated as general partnerships under income tax rules. This will ensure HMRC can continue to amend LLP members’ tax returns where the LLP operates without a view to profit. This measure does not create any new or additional obligations or liabilities for taxpayers. It clarifies the legislation to ensure the rules work as designed and intended. 2.263 HMRC automation – As announced on 31 October 2019,33 the government will legislate to confirm that HMRC may use automated processes to issue taxpayers with notices to file tax returns and penalty notices. This measure will apply prospectively and retrospectively to put beyond doubt that the rules work as designed and intended. This does not create any new or additional obligations or liabilities for taxpayers. 2.264 Insurance Premium Tax (IPT) call for evidence – The government will shortly publish a summary of responses to the recent call for evidence on the operation of IPT,34 along with information on a forthcoming consultation setting out the next stage in reforming how 2.265 Funding HMRC to prepare for breathing space – The government will invest an additional £12.5 million in HMRC in 2020-21 to begin work immediately on the implementation of breathing space. From early 2021 this will mean that those in problem debt can access a 60-day breathing space, including for debts to HMRC, while they engage with debt advice and work towards a sustainable debt solution. 2.266 Boosting competition in the digital and wider economy – The government will accept all six of the Furman Review’s35 strategic recommendations for unlocking competition in digital markets. The government will consult on these in due course. A new cross-regulator taskforce, based in the Competition and Markets Authority (CMA), will report to the government within six months on a pro-competitive regime for digital platform markets. This will include advice on implementing a pro-competitive code of conduct for digital platforms with strategic market power. The government will also look at existing domestic or EU derived regulations that might hinder digital competition and entrench monopoly behaviours and will ensure that regulatory reforms applying to digital and tech businesses are pro-innovation and coherent. 2.267 Reforming Regulation Initiative – Good regulation is essential to successful businesses. The government will strive to achieve the right balance between supporting excellent business practice and providing protections for people and the environment. The Budget announces that BEIS is launching the Reforming Regulation Initiative. This will invite ideas from business and the public for regulatory reform in order to ensure that regulation is sensible and proportionate now that the UK has left the EU, and that the interests of small businesses are 2.268 Regulators’ Pioneer Fund – The government will launch a second round of the Regulators’ Pioneer Fund, building on the success of the first round which was launched at Autumn Budget 2017.
This £10 million of funding will enable regulators to unlock the potential of emerging technologies and help businesses to develop innovative products and services. 33 ‘HM Revenue and Customs Written Statement – HCWS61’, House of Commons, October 2019. 34 ‘Call for the operation of Insurance Premium Tax’, HM Revenue & Customs, June 2019. 35 ‘Unlocking digital competition, Report of the Digital Competition Expert panel’, HM Treasury, March 2019

2.269 Financial Services Bill – The Financial Services Bill will provide long-term market access between the UK and Gibraltar for financial services firms following EU exit, support a vibrant asset management industry by simplifying the process for overseas investment funds seeking to market into the UK and enable the implementation of the remaining Basel banking standards and a more proportionate prudential regime for investment firms. The government has published further details alongside Budget ahead of legislating later in the session. As a result of the proposed changes to the prudential regime for investment firms, the government will be taking steps to ensure that bank tax legislation continues to operate in line with current policy. 2.270 Regulatory Coordination – The Financial Services Future Regulatory Framework Review was announced at Mansion House 2019, with the first phase launching a call for evidence on regulatory coordination in July. The government is publishing a response to the call for evidence alongside Budget and setting out the next steps in the review. This response announces a new forum, bringing together government and regulators, to provide industry with a forward-look of upcoming regulatory initiatives. This forum will be made up of the Bank of England, Prudential Regulation Authority, Financial Conduct Authority (FCA), Payment Systems Regulator and Competition and Markets Authority, with HM Treasury as an observer member. 2.271 Access to cash legislation – The government will bring forward legislation to protect access to cash for those who need it. This will ensure industry continues to meet the changing 2.272 Regulation of pre-paid funeral plans – The government is publishing the response to its consultation on the regulation of pre-paid funeral plans and will legislate to bring funeral plan providers within the remit of the FCA. This will protect consumers by ensuring, for the first time, that all pre-paid funeral plan providers are subject to robust regulation. 2.273 Changes to the Credit Unions Act – The government will bring forward legislation to allow credit unions to offer a wider range of products and services to their members, supporting their vital role in financial inclusion. 2.274 Fintech review and delivery panel – The government has invited Ron Kalifa OBE to lead a major review into the fintech sector. The review will identify what more industry and government can do to support growth and competitiveness, to ensure that the UK maintains its global leadership in this vital sector. The government will also extend funding for the Fintech Delivery Panel, as well as touring the regions and nations of the UK to showcase its diverse range 2.275 Digital currencies discussion paper – The government looks forward to the publication of the Bank of England’s discussion paper on a possible UK central bank digital currency (CBDC). The UK will continue to take a leading role in exploring digital currencies, and the wide-ranging opportunities and challenges they could bring. 2.276 Cryptoassets consultation – To protect consumers and support innovation in cryptoassets, the government intends to consult on a measure to bring certain cryptoassets into scope of financial promotions regulation. The government also intends to consult later in 2020 on the broader regulatory approach to cryptoassets, including new challenges from 2.277 Call for evidence for the Payments Landscape Review – In light of rapid technology developments, HM Treasury, working alongside the regulators and the Financial Policy Committee, is leading a Payments Landscape Review to make sure the UK’s payments infrastructure and regulation are keeping pace. As part of this, HM Treasury will shortly be publishing a call for evidence to ask what more could be done by the government, industry and regulators to support a more innovative and resilient payments system and ensure the UK payments sector remains world leading. 2.278 Open finance for SMEs – In order to realise the vision for truly open finance, in which SMEs can share their data at the touch of a button, making it faster and easier to shop around for credit, HM Treasury will convene a summit with those at the cutting edge of industry innovation to establish what further data needs to be opened up. 2.279 Digital Identity Unit – The government will work to create a digital identity market that makes it possible for people to prove things about themselves without showing paper documents. This will help make opening a bank account, claiming benefits or buying a house simpler, safer and quicker. More secure and cost-effective online transactions will also boost business and the digital economy. 2.280 Affordable Credit Challenge Fund – By harnessing the UK’s world-leading fintech expertise, this £2 million challenge fund promotes the development of innovative tech solutions that improve awareness and access to affordable lenders as an alternative to high cost credit. The winners of the challenge are Fair for You with EML and Lending Metrics, Police Credit Union with Credit Kudos, and Capital Credit Union with Nivo and Soar who will each receive £200,000 to further develop and scale their solutions. Financial transactions, asset sales and other decisions 2.281 Royal Bank of Scotland – The government intends to fully dispose of its Royal Bank of Scotland shareholding, subject to market conditions and achieving value for money for taxpayers. The government expects the programme of sales to be completed by 2024-25.
2.282 UK Asset Resolution (UKAR) – UKAR’s balance sheet has reduced from £115.8 billion in 2010 to £8 billion following the latest sale of assets.36 The government expects to return UKAR’s subsidiaries Bradford & Bingley (B&B), NRAM Ltd37 and their remaining assets to private ownership in 2020, subject to achieving value for money and market conditions 2.283 In May 2019, the government transferred sponsorship of B&B’s and NRAM Ltd’s pension schemes to UKAR in preparation for B&B and NRAM Ltd being returned to private ownership. The government intends, subject to securing the necessary parliamentary time, to create a new central government pension scheme for the members of the B&B and NRAM schemes. Members’ pensions will not be affected by this transfer. Following the establishment of a new central government pension scheme, the government intends to sell assets held by the NRAM and B&B schemes over 2023-24 and 2024-25, subject to the necessary legislation being brought forward, supportive market conditions and achieving value for money. 2.284 Student loan sale – In December 2018, the government completed the second in its programme of sales of pre-2012 income-contingent student loans, expected to raise £15 billion by 2022-23. The sale raised £1.9 billion, reducing PSND and achieving value for money. Following an internal review, which was published at Budget, the government has decided not to pursue additional sales of pre-2012 income-contingent student loans. 2.285 The government continues to explore options for the sale of wider corporate and financial assets, where there is no longer a policy reason to retain them and when value for money can be secured for taxpayers. 2.286 Retail Prices Index consultation – Alongside the Budget, the government and UK Statistics Authority (UKSA) are launching a consultation, announced on 4 September 2019,38 on UKSA’s proposal to address the shortcomings of the Retail Prices Index (RPI) measure 36 37 NRAM Ltd was formerly part of Northern Rock. 38 ‘Letter from Savid Javid, former Chancellor of the Exchequer’, HM Treasury, September 2019.

of inflation. The consultation will cover, among other things, the issue of timing, including whether the UKSA’s proposal might be implemented at a date other than 2030, and if so, when between 2025 and 2030, and issues on technical matters concerning the implementation of its proposal. The consultation will be open for a period of six weeks, closing on 22 April 2020. The government and UKSA will respond to the consultation before the Parliamentary summer recess. 2.287 MPC remit – The Chancellor is responsible for setting the MPC’s remit. In the Budget, the Chancellor reaffirms the symmetric inflation target of 2% for the 12-month increase in the CPI measure of inflation. This target applies at all times.39 The Chancellor also confirms that the Asset Purchase Facility (APF) will remain in place for the financial year 2020-21. 2.288 Balance Sheet Review – The government manages assets worth £2 trillion alongside £4.6 trillion of liabilities on behalf of citizens.40 The Balance Sheet Review (BSR) was launched in 2017 to identify opportunities to dispose of assets that no longer serve a policy purpose, improve returns on retained assets, and reduce the risk and cost of liabilities. This work aims to put the UK at the forefront of the international drive to reduce waste and deliver improvements in the cost-effective management of public wealth, as recognised by the IMF in its October 2018 Fiscal Monitor. The BSR will conclude and report at this year’s Comprehensive Spending Review. 2.289 The government is exposed to £192 billion of contingent liabilities, including guarantees and insurance provided to the private sector.41 The BSR has developed proposals to improve the management of these liabilities and address a key balance sheet risk recognised by the OBR in its July 2019 Fiscal Risk Report.42 The government is publishing a report alongside ‘Government as insurer of last resort’ providing more detail on the policy approach. 39 ‘Monetary policy Budget 2020’, HM Treasury, March 2020. 40 ‘Whole of Government Accounts 2017 to 2018’; HM Treasury; May 2018. 41 ‘Whole of Government Accounts 2017 to 2018’; HM Treasury; May 2018. 42 ‘Fiscal Risks Report 2019’, OBR, July 2019

A.1 This annex sets out the details of the government’s financing plans in 2020-21. Further details can be found in the ‘Debt management report 2020-21’, available at A.2 The debt management objective, as set out in the ‘Debt management report 2020-21’, is “to minimise, over the long term, the costs of meeting the government’s financing needs, taking into account risk, while ensuring that debt management policy is consistent with A.3 While decisions on debt management policy must be taken with a long-term perspective, specific decisions on funding the government’s gross financing requirement are taken annually. Those decisions are announced before the start of the forthcoming financial year and can be A.4 At Budget 2018 – and as part of the government’s responsible approach to fiscal risk management – the government announced that it would look to reduce the proportion of index-linked gilt issuance in a measured fashion over the medium term. Consistent with this, the 2020-21 financing remit includes a reduction in index-linked gilt issuance compared A.5 Alongside the Budget, the government and the UK Statistics Authority (UKSA) are launching a consultation, announced on 4 September 2019, on UKSA’s proposal to address the shortcomings of the RPI measure of inflation. The consultation will be open for responses for a period of six weeks, closing on 22 April. The government and UKSA will respond to the consultation before the Parliamentary summer recess. A.7 The OBR’s March 2020 ‘Economic and fiscal outlook’ forecast for the 2020-21 central government net cash requirement (excluding NRAM ltd, Bradford & Bingley and Network Rail), which is referred to as CGNCR (ex NRAM, B&B and NR), is £65.3 billion. This measure is used in the financing arithmetic as it reflects the forecast cash requirement of the Exchequer. The relationship between public sector net borrowing and CGNCR (ex NRAM, B&B and NR) is set out in the OBR’s March 2020 ‘Economic and fiscal outlook’.
The OBR’s forecast does not incorporate either the most recent estimate of the likely fiscal impact of COVID-19 or the government’s policy response. The government’s financing plans for 2020-21 will be updated to reflect this at

A.8 The net financing requirement (NFR) for the Debt Management Office (DMO) CGNCR (ex NRAM, B&B and NR) plus any financing for gilt redemptions and other adjustments, less the net contribution to financing from NS&I and any other in-year contributions A.9 The NFR for 2020-21 is forecast to be £156.1 billion, • the forecast for CGNCR (ex NRAM, B&B and NR) of £65.3 billion • gilt redemptions of £97.6 billion • a planned short-term financing adjustment of -£0.8 billion resulting from unanticipated • a net contribution to financing from NS&I of £6 billion is currently anticipated that there will be a zero net contribution to debt financing in 2020-21 Gilt issuance by method, type and maturity A.11 Decisions on the skew of gilt issuance are made annually with reference to the government’s debt management objective, as set out in the ‘Debt management A.12 Auctions will remain the government’s primary method of gilt issuance. It is anticipated that £124.1 billion (79.5%) of total gilt sales will be issued by auction in 2020-21, and up to around £24.0 billion (15.4%) will be issued by syndication. The government will continue to use gilt tenders to supplement issuance by auction and syndication. A.13 Issuance by auction and syndication is planned to be split by maturity and type as • £51.0 billion of short conventional gilts (32.7% of total issuance) • £34.2 billion of medium conventional gilts (21.9% of total issuance) • £42.3 billion of long conventional gilts (27.1% of total issuance) • £20.6 billion of index-linked gilts (13.2% of total issuance) A.14 The financing plans of the DMO include an initially unallocated portion of issuance through which gilts of any maturity or type may be issued, subject to prior notification. This unallocated portion is set at £8.0 billion (5.1% of total issuance). The unallocated portion is used in such a way as to respond appropriately to evolving market conditions in-year. A.15 Treasury bills for debt management purposes are forecast to constitute £62.0 billion of the total debt stock at the end of 2019-20. It is currently anticipated that net issuance of Treasury bills for debt management purposes will be zero, which means that they will make no net contribution to debt financing in 2020-21. A.16 NS&I will have a net financing target of £6 billion in 2020-21, within a range of £3 billion to £9 billion. This target reflects NS&I’s requirement to balance the interests of its savers, the taxpayer, and the wider financial services sector. Illustrative future gross financing requirement 2021-22 to 2024-25, using the OBR March 2020 forecast for CGNCR (ex NRAM, B&B and NR) and taking into account current planned gilt redemptions. CGNCR (ex NRAM, B&B and NR)2 43.1 65.3 Redemption of the sovereign Sukuk 0.2 na Planned financing for the Official Reserves 6.0 0.0 Financing adjustment carried forward from previous financial years 4.0 -0.8 Gross financing requirement 152.2 162.1 Net financing requirement (NFR) for the Debt Management Office (DMO) 142.1 156.1 DMO’s NFR will be financed Short conventional gilts 42.8 51.0 Medium conventional gilts 34.0 34.2 Long conventional gilts 36.9 42.3 Unallocated amount of gilts 0.0 8.0 Total gilt sales for debt financing 136.9 156.1 Total net contribution of Treasury bills for debt financing 6.0 0.0 1 Figures may not sum due to rounding. 2 Central government net cash requirement (excluding NRAM ltd, Bradford & Bingley and Network Rail). 3 Prior to publication of the end-year outturn in April each year, this financing item will mainly comprise estimated revenue from coinage. HM Treasury, NS&I, Office for Budget Responsibility and Debt Management Office. 2021-22 2022-23 2023-24 2024-25 CGNCR (ex NRAM, B&B and NR)2 73.0 69.9 64.0 72.6 Gilt redemptions 79.3 73.3 71.8 90.6 Total illustrative gross financing requirement 152.4 143.2 135.7 163.2 1 Figures may not sum due to rounding. 2 Central government net cash requirement (excluding NRAM ltd, Bradford & Bingley and Network Rail). HM Treasury, Office for Budget Responsibility and Debt Management Office. Attendance Allowance1 Benefits paid from DEL2 Bereavement benefits Jobseeker’s Allowance and its passported Housing Benefit Carer’s Allowance1 Northern Ireland social security outside welfare cap Child Benefit (including Guardian's Allowance) State Pension (basic and additional) Christmas Bonus Transfers within government (e.g. Over 75s TV licences) Disability Living Allowance1 Universal Credit payments to jobseekers Employment and Support Allowance Housing Benefit (except HB passported from JSA) Northern Ireland social security in welfare cap Other DWP benefits below £0.1 billion pa in welfare cap Personal Independence Payment1 Social Fund – Cold Weather Payments Universal Credit (except payments to jobseekers) 1 Including linked Scottish Government block grant addition. 2 These payments are subject to firm spending control through the usual DEL process. C.1 The Office for Budget Responsibility (OBR) has published its March 2020 ‘Economic and fiscal outlook’ alongside Budget 2020. This annex reproduces the OBR’s key forecasts for the economy and public finances. Further detail and explanation can be found in the OBR’s report.
Percentage change on a year earlier, unless otherwise stated 2018 2019 2020 2021 2022 2023 2024 Gross domestic product (GDP) 1.3 1.4 1.1 1.8 1.5 1.3 1.4 GDP per capita 0.7 0.8 0.5 1.3 1.1 0.9 1.1 GDP level (2018=100) 100.0 101.4 102.5 104.3 105.8 107.1 108.6 Nominal GDP 3.5 3.3 3.1 3.8 3.7 3.4 3.5 Output gap (per cent of potential output) 0.2 0.1 -0.1 0.4 0.4 0.2 0.0 Domestic demand 1.3 1.6 1.1 2.0 1.7 1.6 1.7 Household consumption¹ 1.6 1.3 1.1 1.2 1.2 1.4 1.4 General government consumption 0.4 3.6 3.7 2.8 2.1 1.9 2.2 Fixed investment -0.2 0.4 -0.8 3.4 2.9 2.0 1.8 Business -1.5 0.3 0.0 1.8 3.0 2.4 2.3 General government² 1.3 2.1 1.9 10.9 4.6 1.8 1.2 Private dwellings² 6.5 -0.3 -4.2 1.5 1.6 1.3 1.2 Change in inventories3 0.2 0.1 -0.1 0.1 0.0 0.0 0.0 Exports of goods and services 1.2 3.7 -0.6 -0.5 -0.6 -1.1 -1.0 Imports of goods and services 2.0 3.6 -0.2 0.4 0.2 0.2 0.2 Balance of payments current account (Per cent of GDP) -3.9 -3.9 -3.8 -3.9 -4.0 -4.0 -4.1 GDP deflator at market prices 2.2 1.8 2.0 2.0 2.2 2.1 2.1 Employment (millions) 32.4 32.8 33.0 33.1 33.2 33.3 33.4 Productivity per hour 0.5 0.0 0.9 1.2 1.2 1.1 1.2 Wages and salaries 4.8 3.5 3.6 3.8 3.6 3.3 3.2 Average earnings4 3.3 2.8 3.3 3.6 3.4 3.1 3.1 LFS unemployment (% rate) 4.1 3.8 3.8 3.8 3.9 4.0 4.1 Real household disposable income 2.4 0.8 1.1 1.6 1.3 1.4 1.4 Saving ratio (level, per cent) 5.8 5.7 6.6 7.0 7.2 7.2 7.2 House prices 3.2 1.5 3.3 7.0 5.8 4.6 3.8 World GDP at purchasing power parity 3.6 2.9 3.0 3.6 3.5 3.6 3.6 Euro area GDP 1.9 1.2 1.1 1.4 1.4 1.3 1.3 World trade in goods and services 3.7 1.1 1.9 3.9 3.6 3.7 3.8 UK export markets5 3.0 1.5 1.6 3.4 3.3 3.4 3.5 1 Includes households and non-profit institutions serving households. 2 Includes transfer costs of non-produced assets. 3 Contribution to GDP growth, percentage points. 4 Wages and salaries divided by employees. 5 Other countries’ imports of goods and services weighted according to the importance of those countries in the UK’s total exports. Per cent of GDP , unless otherwise stated 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Public sector current receipts (a) 37.5 37.7 37.9 38.0 38.3 38.4 38.5 Total managed expenditure (b) 39.3 39.8 40.3 40.8 40.8 40.8 40.7 Public sector current expenditure (c) 35.0 35.3 35.4 35.7 35.6 35.5 35.4 Public sector net investment (d) 2.0 2.2 2.6 2.9 3.0 3.0 3.0 Depreciation (e) 2.3 2.2 2.3 2.3 2.3 2.3 2.3 Legislated fiscal mandate and supplementary target Cyclically adjusted net borrowing 1.9 2.2 2.4 3.0 2.7 2.5 2.2 Public sector net debt1 80.6 79.5 77.4 75.0 75.4 75.6 75.2 Current budget deficit (c+e-a) -0.3 -0.1 -0.2 -0.1 -0.5 -0.7 -0.8 Debt-interest-to-revenue ratio (per cent) 4.1 3.8 3.3 3.5 3.3 3.1 2.9 Public sector net borrowing (b-a) 1.8 2.1 2.4 2.8 2.5 2.4 2.2 Cyclically adjusted current budget deficit -0.1 0.0 -0.2 0.1 -0.2 -0.5 -0.8 Primary deficit 0.3 0.7 1.2 1.5 1.2 1.2 1.1 Cyclically adjusted primary deficit 0.4 0.8 1.2 1.7 1.5 1.3 1.1 Central government net cash requirement 2.4 2.0 2.8 3.1 2.8 2.5 2.7 Public sector net cash requirement 2.1 1.4 1.1 0.3 2.9 2.6 2.7 Alternative balance sheet metrics Public sector net debt ex. Bank of England 72.3 71.9 71.9 72.3 72.9 73.1 72.9 Public sector net financial liabilities 67.4 66.7 65.9 65.3 64.9 64.5 63.4 Treaty deficit2 1.8 2.2 2.5 3.1 2.6 2.4 2.4 Cyclically adjusted Treaty deficit 1.9 2.3 2.5 3.3 2.8 2.5 2.4 Treaty debt ratio3 84.1 83.2 82.9 83.2 83.3 83.3 83.0 Current budget deficit -5.8 -1.7 -4.9 -2.7 -11.7 -16.7 -21.2 Public sector net investment 44.3 49.1 59.7 69.3 73.2 77.0 79.1 Public sector net borrowing 38.4 47.4 54.8 66.7 61.5 60.2 57.9 Cyclically adjusted net borrowing 41.4 48.2 55.3 71.8 68.1 63.9 58.7 Cyclically adjusted current budget deficit -2.8 -1.0 -4.4 2.5 -5.1 -13.1 -20.4 Public sector net debt 1774 1799 1818 1827 1900 1969 2031 Net debt interest 32.5 30.9 28.1 31.2 30.6 29.3 28.5 Non-interest receipts 788.9 811.8 845.3 881.9 918.6 952.3 988.4 Output gap (per cent of GDP) 0.3 0.0 0.1 0.4 0.4 0.1 0.0 1 Debt at end October; GDP centred on end October. 2 General government net borrowing. 3 General government gross debt. Uses financial year GDP . 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Restated March 2019 forecast 82.2 81.3 78.2 74.3 73.6 72.7 March 2020 forecast 80.6 79.5 77.4 75.0 75.4 75.6 75.2 Like-for-like change -1.5 -1.8 -0.8 0.7 1.9 2.9 Change in nominal GDP1 -1.3 -1.0 -1.1 -1.2 -1.0 -0.9 Change in cash level of net debt -0.3 -0.8 0.4 1.9 2.9 3.8 Restated March 2019 forecast 1,779 1,817 1,810 1,781 1,827 1,870 March 2020 forecast 1,774 1,799 1,818 1,827 1,900 1,969 2,031 Like-for-like change in cash debt -6 -18 8 46 73 99 Underlying forecast revisions -6 -29 -20 -7 -5 -3 Public sector net borrowing (pre- Financial transactions (pre-measures) -4 -17 -7 0 0 1 Valuation changes 1 -10 -13 -12 -14 -15 Effect of Government decisions 11 28 54 78 102 125 Affecting public sector net borrowing -1 15 46 78 112 148 Affecting financial transactions 13 11 12 16 17 12 Indirect effects -1 3 -5 -16 -27 -36 1 Non-seasonally adjusted GDP centred end-March.
2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Restated March 2019 forecast 41.0 47.6 40.2 37.6 35.4 33.3 March 2020 forecast 38.4 47.4 54.8 66.7 61.5 60.2 57.9 Change -2.5 -0.2 14.6 29.1 26.0 26.9 Underlying revisions -2.5 0.4 2.3 5.1 3.6 1.5 Receipts1 -3.3 -4.9 1.0 3.5 4.1 3.5 Debt interest 0.5 -2.0 -6.7 -6.6 -7.7 -8.5 Other spending1 0.3 7.3 7.9 8.2 7.1 6.5 decisions2 -0.6 12.3 24.0 22.5 25.4 29.1 Current departmental spending2 Capital departmental spending2 Use of direct Brexit fiscal savings 0.0 -4.3 -5.0 -7.1 -11.3 -14.6 Indirect effects of Government decisions 0.0 -3.3 -7.1 -9.7 -8.4 -7.2 Due to tax and spending measures 0.0 -3.4 -7.2 -9.7 -8.3 -7.0 Raising the National Living Wage 0.0 0.0 -0.3 -0.6 -0.9 -1.2 New migration regime 0.0 0.0 0.3 0.5 0.8 1.0 38.4 48.1 42.5 42.7 39.0 34.9 28.8 1 Excludes the impact of customs duties switch, which raises receipts and current spending by the same amount. 2 The change in 2024-25 is relative to a baseline that assumes DEL would otherwise have remained constant as a share of GDP . 3 Includes both scorecard and non-scorecard measures. See Annex A for more information. 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Income tax1 192.6 195.2 207.5 217.4 227.3 236.6 246.6 of Pay as you earn 163.5 165.3 175.5 184.3 193.3 201.0 209.7 Self assessment 31.5 32.3 34.3 35.9 37.2 38.9 40.5 Other income tax -2.4 -2.4 -2.2 -2.8 -3.2 -3.4 -3.6 National insurance contributions 137.3 145.4 150.2 157.0 164.0 170.3 177.1 Value added tax 133.1 136.6 140.6 145.9 151.0 155.8 160.7 Corporation tax2 56.3 55.1 58.1 60.0 62.6 64.9 67.2 of Onshore 54.4 54.0 57.2 58.9 61.4 63.6 66.0 Offshore 1.9 1.1 0.9 1.1 1.1 1.2 1.2 Petroleum revenue tax -0.7 -0.4 -0.3 -0.3 -0.2 -0.2 -0.2 Fuel duties 28.0 27.7 27.5 28.1 30.5 31.2 31.7 Business rates 30.6 31.2 31.5 33.4 34.3 34.9 36.2 Council tax 34.8 36.2 37.9 39.1 40.3 41.6 42.9 VAT refunds 18.3 19.2 20.2 21.0 21.8 22.5 23.7 Capital gains tax 9.2 10.0 11.4 12.7 14.3 15.7 17.0 Inheritance tax 5.4 5.1 5.5 5.9 6.3 6.7 7.1 Property transaction taxes3 12.9 12.8 13.8 14.7 16.2 17.4 18.7 Stamp taxes on shares 3.6 3.4 3.6 3.7 3.9 4.0 4.1 Tobacco duties 9.2 8.7 9.0 8.8 8.8 8.7 8.7 Alcohol duties 12.1 12.1 11.9 12.4 12.8 13.3 13.9 Air passenger duty 3.6 3.8 4.0 4.2 4.4 4.6 4.8 Insurance premium tax 6.3 6.5 6.6 6.7 6.9 7.0 7.1 Climate change levy 1.9 2.1 2.2 2.1 2.3 2.4 2.6 Bank levy 2.5 2.4 1.9 1.1 1.1 1.1 1.0 Bank surcharge 1.8 1.5 1.6 1.6 1.6 1.7 1.7 Apprenticeship levy 2.6 2.8 3.0 3.1 3.2 3.3 3.5 Soft drinks industry levy 0.3 0.3 0.3 0.3 0.3 0.3 0.4 Digital services tax 0.0 0.1 0.3 0.4 0.4 0.5 0.5 Other HMRC taxes4 7.4 7.4 7.4 7.6 7.7 7.7 7.8 Vehicle excise duties 6.5 6.7 7.1 7.0 7.2 7.4 7.6 Licence fee receipts 3.2 3.3 3.6 3.8 3.8 3.9 3.9 Environmental levies 7.5 10.2 9.6 9.9 9.8 10.4 10.8 EU ETS auction receipts 0.3 1.5 1.2 1.2 1.3 1.3 1.3 Other taxes 8.8 8.8 9.0 9.3 9.7 9.8 9.9 National Accounts taxes 735.3 755.8 786.2 818.2 853.6 885.0 918.6 Less own resources contribution to EU -3.4 -3.4 -2.4 - - - - Interest and dividends 24.0 27.6 27.6 28.9 30.6 32.4 33.9 Gross operating surplus 52.9 54.3 57.0 58.7 61.3 63.5 66.2 Other receipts 4.0 5.0 4.5 4.9 3.7 3.8 3.6 Current receipts 812.9 839.3 872.9 910.8 949.2 984.7 1,022.3 UK oil and gas revenues5 1.1 0.7 0.7 0.9 0.9 1.0 1.0 1 Includes PAYE, self assessment, tax on savings income and other minor components, such as income tax repayments. 2 National Accounts measure, gross of reduced liability tax credits. 3 Includes SDLT, ATED and devolved property transaction taxes. 4 Consists of landfill tax (excluding Scotland and Wales), aggregates levy, betting and gaming duties, customs duties and diverted profits tax. 5 Consists of offshore corporation tax and petroleum revenue tax.
2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Public sector current expenditure (PSCE) PSCE in RDEL 295.6 316.3 339.8 361.3 375.9 391.8 408.6 PSCE in AME 462.7 471.4 476.0 492.8 505.6 518.1 532.2 Welfare spending 222.8 224.6 231.2 237.8 246.8 256.9 266.8 Inside welfare cap 119.5 119.0 122.6 124.3 127.0 130.2 133.5 Outside welfare cap 103.3 105.6 108.6 113.5 119.8 126.7 133.4 Locally financed current expenditure 52.7 53.9 55.0 55.1 56.9 58.6 60.1 Central government debt interest, net of APF 1 37.5 38.2 34.5 37.8 37.9 37.3 36.8 Scottish Government’s current expenditure 27.9 32.0 33.5 35.6 37.4 38.9 40.7 Expenditure transfers to EU institutions2 12.2 11.0 9.0 11.1 8.4 4.7 2.2 Assumed spending in lieu of EU transfers 2 - - - - - - - Net public service pension payments 12.9 6.9 4.2 2.9 2.0 1.2 0.3 Company and other tax credits 6.2 6.8 7.4 7.9 8.4 8.8 9.2 BBC current expenditure 3.0 3.8 4.0 4.0 4.1 4.1 4.2 National lottery current grants 1.2 1.3 1.3 1.1 1.0 1.0 0.9 General government imputed pensions 0.9 1.3 1.3 1.3 1.3 1.3 1.3 Public corporations’ debt interest 0.4 0.4 0.4 0.4 0.5 0.5 0.5 Funded public sector pension schemes 18.7 19.5 20.5 21.4 22.4 23.5 24.6 General government depreciation 41.1 42.2 44.1 45.7 47.4 49.3 51.3 Current VAT refunds 16.1 16.9 17.7 18.4 19.1 19.7 20.9 Environmental levies 7.8 10.7 10.6 11.0 10.9 11.5 12.0 Other PSCE items in departmental AME3 2.2 1.6 1.2 1.4 1.5 1.5 1.6 Other National Accounts adjustments -1.0 0.3 0.1 -0.2 -0.5 -0.8 -1.2 Total public sector current expenditure 758.3 787.7 815.8 854.1 881.5 909.9 940.8 Public sector gross investment (PSGI) PSGI in CDEL 50.8 59.9 71.2 82.2 86.6 91.5 94.8 PSGI in AME 42.2 39.1 40.7 41.1 42.6 43.5 44.6 Locally financed capital expenditure 13.1 13.1 10.9 10.3 10.8 10.3 10.4 Public corporations' capital expenditure 9.9 11.0 11.4 11.4 11.5 11.7 11.9 Student loans 10.1 9.8 10.6 11.2 11.9 12.4 12.8 Funded public sector pension schemes 1.6 0.8 0.9 0.9 0.9 0.9 0.9 Scottish Government's capital expenditure 3.4 4.0 4.6 5.4 5.6 5.8 6.0 Tax litigation 0.0 0.0 1.8 1.2 1.1 1.1 1.1 Other PSGI items in departmental AME3 6.8 0.8 0.8 0.8 0.8 0.7 0.6 Other National Accounts adjustments -2.7 -0.4 -0.3 0.0 0.0 0.6 0.7 Total public sector gross investment 93.0 99.1 111.9 123.3 129.2 135.0 139.4 Less public sector depreciation -48.8 -49.9 -52.2 -54.0 -56.0 -58.1 -60.3 Public sector net investment 44.3 49.1 59.7 69.3 73.2 77.0 79.1 Total managed expenditure 851.3 886.8 927.7 977.4 1,010.7 1,044.9 1,080.2 1 Includes reductions in debt interest payments due to the APF . 2 From 2019-20 onwards, the expenditure transfers to EU institutions reflect the estimated cost of the financial settlement that the UK will pay the EU 3 Includes Network Rail current and capital expenditure in 2018-19 only. AARG Average annual real growth AFRS Agricultural Flat Rate Scheme AME Annual Managed Expenditure ATED Annual Tax on Enveloped Dwellings BEIS Department for Business, Energy and Industrial Strategy CBDC Central Bank Digital Currency CCRT Catastrophe Containment and Relief Trust CCS Carbon Capture and Storage CDEL Capital Departmental Expenditure Limits CGNCR Central Government Net Cash Requirement CIS Construction Industry Scheme CMA Competition and Markets Authority CPIH Consumer Prices Index including owner occupiers’ housing costs CSR Comprehensive Spending Review DCMS Department for Digital, Culture, Media and Sport DEFRA Department for Environment, Food and Rural Affairs DEL Departmental Expenditure Limits DHSC Department of Health and Social Care DIT Department for International Trade DWP Department for Work and Pensions EMI Enterprise Management Incentives FCA Financial Conduct Authority

HIP Health Infrastructure Plan IHS Immigration Health Surcharge IMF International Monetary Fund IPCC Independent Panel on Climate Change ISA Individual Savings Account JISA Junior Individual Savings Account LIBOR London Inter-Bank Offered Rate LLP Limited Liability Partnership MHCLG Ministry of Housing, Communities and Local Government NIC National Infrastructure Commission NICs National Insurance Contributions NIHR National Institute for Health Research NRAM Northern Rock (Asset Management) NS&I National Savings and Investments NSSIF National Security Strategic Investment Fund NUTS Nomenclature of Territorial Units for Statistics OBR Office for Budget Responsibility OECD Organisation for Economic Co-operation and Development ONS Office for National Statistics PIP Personal Independence Payments POTAS Promoters of Tax Avoidance Scheme PSCE Public Sector Current Expenditure PSGI Public Sector Gross Investment PSNFL Public Sector Net Financial Liabilities PSNI Public Sector Net Investment

RDEC Research and Development Expenditure Credit RDEL Resource Departmental Expenditure Limits RHDI Real Household Disposable Income RIS2 Second Road Investment Strategy SBA Structures and Buildings Allowance SBC Small Business Commissioner SBRR Small Business Rates Relief SME Small Medium sized Enterprise SMI Support for Mortgage Interest UKSPF UK Shared Prosperity Fund ULEV Ultra Low Emission Vehicles WGA Whole of Government Accounts

earlier, unless otherwise stated) March 2019 forecast (£ billion) 2019 forecast as a percentage of GDP excluding depreciation, in £ billion) and Capital DEL from 2019-20 to 2024-25 (£ billion, unless otherwise stated)

across the UK, 2015 to 2019, at example percentile points

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