The newly appointed Chancellor, Rishi Sunak, announced a spirited Budget with a repeated emphasis on ‘getting things done’, echoing the recent election campaign. His initial focus was on the short-term measures needed to deal with the challenges the UK faces as a result of the coronavirus pandemic. These amounted to a £12bn fiscal stimulus, with more available if required. There was help for both businesses and individuals.
What are the other key points of note in the Budget?
- Statutory sick pay: For the coming year, statutory sick pay will be available to more people and so will some other social security benefits.
- Business Rates: Business Rates will be reduced or even eliminated for some smaller businesses – at least in the short term. Other immediate support initiatives for smaller businesses include greater access to bank lending, as well as enhancements to the HMRC ‘Time to Pay’ service.
- Pension annual allowances: The changes to the taper of the pension annual allowances will mean that many fewer higher paid people – especially important for the NHS – will be hit by a reduced annual allowance. Doctors, judges and a good many businesses will be pleased by the changes to the pension annual allowance.
- Entrepreneurs’ relief: Entrepreneurs’ relief was nearly a goner. But the Chancellor relented and just brought the lifetime limit down from £10 million to £1 million. Maybe that’s what the Treasury aimed to do all the time, but it softened the blow by trailing rumours of its abolition. The reduction of entrepreneurs’ relief to £1 million of gain was well trailed, and for a time abolition seemed a possibility.
- Company cars: From April 2021, only electric and other zero-emission cars will qualify for first year allowances and cars with emissions over 50 g/km will qualify for writing down allowances of just 6% a year.
- NIC employment allowance: The increase in the NIC employment allowance means that many small businesses will not have to pay the first £4,000 of their employer’s national insurance contributions.
- ISA: The increase in the Junior ISA limit up to £9,000 from April 2020 is great news for under 18s with prosperous and generous families and friends.
To read the full summary of the Budget 2020, click here.
The Chancellor is due to announce another Budget in the Autumn and so there were several consultations about possible future tax changes, including new proposals on the treatment of fund management companies, pension tax administration, and aspects of research and development tax credits.
If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the Budget, please contact us to discuss them.
