BUDGET 2020
A Budget of several parts?
In an unprecedented month, March saw not only a full Budget but a series of financial measures to help the economy through the COVID-19 crisis. James Geary gives an overview.
Budget 2020 For businesses
qualify for the higher (18%) rate of tax allowance will fall from 110 g/km to just 50 g/km. � VAT on e-books and digital newspapers will now be zero rated. � The new Structures and Buildings Allowance has been increased from 2% to 3% per annum. � The tax free allowance for use of home has been increased from £4 to £6 per week – it remains possible to claimmore but only where the figure can be substantiated. For individuals: � The headline change, which was not a surprise, was a significant restriction to Entrepreneurs’ Relief, which enables business owners to enjoy a beneficial 10% Capital Gains Tax rate on the disposal of a trading business or trading company shares. The lifetime limit for gains to be eligible has fallen from £10 million to £1 million. � The earnings threshold for primary Class 1 National Insurance contributions
James Geary Head of Corporate Tax
� An increase in the large company R&D Expenditure Credit rate from 12% to 13% from 1 April 2020. � The new cap on R&D tax credits for small and medium sized companies will not now be introduced until 1 April 2021. Further consultation is taking place on the detail, but it seems that HMRC have settled on a £20,000 de minimis, which is good news for start- up companies that do not yet have payrolled employees. � The Employer Allowance has been increased from £3,000 to £4,000, meaning the first £4,000 of employer NIC does not need to be paid. This will now also be restricted to smaller employers with an employer NIC bill of less than £100,000 per annum. � Benefit-in-kind tax for new fully electric cars has fallen to 0% of list price for the new tax year. � However, from next year Capital Allowances on cars may decrease as the emissions threshold for cars to
March saw the first Budget in 18 months, and the content was already significantly influenced by the Coronavirus outbreak. However, on the day we could not foresee the scale of the further changes that would follow as the virus took hold of the world. The Chancellor’s aimwas to provide security for today and prosperity for tomorrow, suggesting that the measures introduced are timely and targeted. However as the month marched on, the focus has shifted substantially to just getting the economy through the current crisis with minimal loss of businesses and jobs. Here we cover the main headlines that will impact both businesses and individuals as a result of both the Budget and subsequent announcements.
(employed individuals) has been increased from £8,632 per annum
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– Spring/Summer 2020
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