What was in the Budget for working parents?

Chancellor Rishi Sunak announced a whole host of measures in his first Budget. But there wasn’t much for working parents hoping for help on childcare costs.

child's drawing


The government’s Budget document promised to support families, but there was little specifically aimed at working parents among the announcements.

The 2020 Budget featured a large number of measures to support the economy in the face of the coronavirus outbreak. Those should benefit all working people by keeping the economy afloat through the expected short term disruption.

But while there was plenty of spending on health, education and roads, Chancellor Rishi Sunak had no extra money for childcare, for example.

He did announce that the tampon tax, the 5% VAT levelled on sanitary products, will be abolished next year. And parents whose babies spend time in neonatal units will get paid leave for the first time. The government also pledged to introduce a Carers Leave policy after it has consulted on the best way to go about that.

According to the Budget documents: “The government’s ambition is to support people and families through a fair and sustainable tax system, that rewards hard work, minimises economic distortions and funds first class public services.”

Self employed mums

Self employed mums would no doubt welcome a nod in the Budget documents to the current unfairness that means they can’t use Shared Parental Leave. The government has promised to “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.” However, the Chancellor will have disappointed many freelancers by forging on with controversial plans to rejig tax through the IR35 reforms.

There was a little boost for mums who have a homeworking arrangement. The allowance that homeworkers can take off their income tax liability to cover the extra expenses of working from home, such as heating and lighting, will rise from £4 per week to £6 per week.

All working parents benefit from an increase in the National Insurance threshold. Anyone employed is expected to be around £100 per year better off. A freelancer will be £78 better off. No-one will pay NI on earnings below £9,500 once the change has been introduced.  Public spending is also to increase on schools, hospitals and roads.


But there was no announcement on the cost of childcare. Earlier in the week parliament debated a public petition that had attracted nearly 150,000 signatures calling for free childcare to kick in when a baby is nine months old – the point at which statutory parental pay ends.

Nurseries have also long complained that the government’s tax free childcare scheme is underfunded. The only announcement on that was a promise to integrate tax-free childcare with school payments systems so parents can fund wraparound care before and after school.


Chancellor Rishi Sunak also announced a range of measures to help the economy withstand the impact of coronavirus. He told MPs that “for a period it’s going to be tough”. But he insisted that the economy is robust and that “life will return to normal”.

  • Employees will be able to access sick pay from their first day off work with coronavirus. Currently they must wait till the fourth day.
  • Self employed people on contributory employment and support allowance will get sick pay from day one rather than day eight. 
  • A new system will be set up so people can get an official sick note through the NHS 111 service rather than having to visit or contact a doctor.
  • Employers will be refunded the cost of up to 14 days of sick pay for employees absent with coronavirus.
  • Tax payments will be deferred.
  • Banks will offer emergency loans under the Coronavirus Business Interruption Loan Scheme.
  • Business rates will be temporarily abolished or slashed for small enterprises. 
  • And the government will hand out £3,000 to qualifying companies to help tide them over the downturn that is expected to accompany coronavirus.

Sunak said up to a fifth of the working population may be off sick at one time due to coronavirus. He described the £30 billion stimulus package as “temporary, timely and targeted”.

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