COMPLIANCE
Budget 2020
LoraMurphy ACIPP, CIPP senior policy liaison officer , provides a summary of key relevant announcements
C hancellor of the Exchequer, Rishi Sunak, delivered a Budget speech that was wide-ranging and with measures intended both to honour some general election manifesto commitments yet also address social and economic issues already requiring attention or arising because of the COVID-19 pandemic. Further information can be found in the CIPP’s Budget 2020 Summary (http://bit. ly/38TeGsp). Income tax for 2020/21 Income tax allowances across the UK are as follows: ● personal allowance – unchanged at £12,500 ● marriage allowance – unchanged at £1,250 (i.e. 10% of the personal allowance) ● married couple’s allowance – increases to £9,075, with a minimum of £3,510 ● blind person’s allowance – increases to £2,500. For taxpayers in England, Wales and Northern Ireland there are no changes to the rates or bands of income tax for 2020/21. The Welsh government announced that it would not vary the Welsh rate of income tax. For Scottish ...exempt employers from any NICs liability on the veteran’s salary up to the UEL
taxpayers, however, the rates and bands have changed; see table.
will not be subject to the van benefit charge.
Tax exemptions ● Leavers from the care system – Finance Bill 2020 will include measures to implement an income tax exemption for the bursary paid by the Education and Skills Funding Agency to care leavers aged between 16 and 24 who begin an apprenticeship. A corresponding exemption will apply for NICs purposes. ● Tax treatment of welfare counselling provided by employers – With effect 6 April 2020, the scope of the tax exemption for counselling service will be extended to include related medical treatment, such as cognitive behavioural therapy, when provided to an employee as part of an employer’s welfare counselling services. ● Working at home allowance – The tax-exempt amount that an employer can pay each week to an employee to meet the additional household costs incurred when home-working arrangements apply, increases to £6 in April 2020. NICs ● Rates – There are no changes to the rates of National Insurance contributions (NICs) in tax year 2020/21. ● Thresholds and limits – Some of the earnings thresholds and limits for class 1 NICs for tax year 2020/21 are changing; see the table. (Note that the upper secondary threshold and the apprentice upper secondary threshold are the same as that for the upper earnings limit (UEL).) ● NICs holiday – From tax year 2021/22, employers will be able to claim a NICs holiday for the first year of civilian
Scotland
Band
Rate
£12,501– £14,585 £14,586– £25,158 £25,159– £43,430 £43,431– £150,000 Above £150,000
Starter rate
19%
Scottish basic rate Intermediate rate
20%
21%
Higher rate
41%
Top rate
46%
Company cars, vans and fuel From 6 April 2020, the following have effect: ● car fuel benefit charg e – the standard amount increases to £24,500 (from £24,100) ● van fuel benefit charge – the standard amount increases to £666 (from £655) ● van benefit charge – the standard amount increases to £3,490 (from £3,430). For zero-emission vans the amount is 80% (previously 60%) of the standard charge. The diesel supplement for company car tax is unchanged at 4%, but cars meeting the Euro 6d standard (also known as Real Driving Emissions Step 2) are exempt from the supplement. The maximum appropriate percentage is also unchanged at 37%. Significant changes to the taxation of company cars, which were announced in previous Budgets, also have effect from 6 April 2020. From April 2021, zero-emission vans
| Professional in Payroll, Pensions and Reward | April 2020 | Issue 59 22
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