On Wednesday the Chancellor announced the first of two budgets this year, as well as being a budget focused on minimising the disruption likely to be caused by the Coronavirus crisis, it was also the first budget of the new government setting out the pathway for the years ahead.
As in previous years we have put together a comprehensive summary of the key changes affecting taxpayers and businesses for the new financial year and this can be accessed here: Budget Summary
- Entrepreneurs relief reduced to the first £1m of lifetime gains
- The taper threshold for pension savings increased by £90,000 so only those earning over £200,000 will have annual allowance charges to deal with
- Freeze on fuel duty and all alcohol duties
- All digital publications and female sanitary products now subject to 0% VAT
- NIC threshold increased to £9,500 from 6 April 2020
- IR35 “Off Payroll Working” rules will be implemented on 1 April 2020 (as previously announced) to large and medium companies in the private sector.
- R&D Expenditure Credit increased to 13% from April 2020
- Temporary extension to small business rates relief from April 2020 (England only at present)
- Plastics Packaging Tax of £200 per tonne from April 2022
- Structures and Buildings Allowance will increase to 3% pa
- Digital Services tax introduced at 2% from April 2020
- Employment allowance increased to £4,000 per annum to reduce Employer NIC liabilities
- SMEs will be able to recover 100% of the statutory sick pay cost for up to 14 days for employees affected by the coronavirus crisis
- Expansion of Time to Pay availability for tax payments by businesses affected by the Coronavirus crisis
- Measures to be introduced to prevent the recovery of CIS refunds by non-compliant businesses
Although the budget speech lasted for more than an hour there was in reality little in terms of content directly related to tax raising measures so it seems the government is committed to borrowing the funds required to allow it to deliver its spending objectives in the short term. That being said, it is likely the second budget speech, in late 2020, will see more focus on tax raising measures so the coming months should give us some indication of the government’s long term plans.
To download our full Budget Summary setting out key tax information for the year ahead please click below.