Budget 2020 is still in the mind of most UK taxpayers and if you would like to know more about what the newly appointed Chancellor Rishi Sunak said in the budget, this blog post summarises some of the major points that were raised.

NO SUPRISES WITH IR35 IN THE BUDGET 2020

A lot of speculations were made before the budget was read about a turnaround with IR35 legislation in the UK. “

He has stated that these changes will be legislated in the Finance bill 2020 and implemented as planned from 6th April 2020,

If you would like to read more about changes in IR35 legislation in the private sector, kindly click.

PROVIDING FOR THE EFFECT OF THE CORONAVIRUS IN THE BUDGET.

Coronavirus is at time of writings impacting a lot of businesses in a negative way and because of the uncertainty of how long it would be around for it was with relief that the chancellor was able to provide some reliefs to the business owner that are always strained at this time.

Some of the measures he stated are as follows:

1. The government would fund statutory sick pay from the first day of absence for up to 14 days and support businesses that are self-employed or workers that have a flexible working arrangement (gig economy).
2. Grants and hardship fund for business and people that have been affected by this virus. The funding available is up to 12 million.

GOOD NEWS FOR BUSINESS RATES IN THE BUDGET 2020.

Small business owners most times struggle to pay the business rates, the chancellor in the budget has given relief to retail business and business that trade in hospitality and leisure.

Therefore, its good news for businesses enjoying this relief from 2020/21 especially as some of them is struggling to compete with an online business.

The change is that the relief has been increased from 50% to 100% for a retail business with a rateable value up to £51,000 and extended to the other business stated above.

OTHER PROMISES FOR SMALL BUSINESS OWNERS IN THE UK FROM BUDGET 2020.

He also mentioned that small business that qualifies for the 100% tax relief stated above would also receive a cash payment of £3000.

A new dedicated HMRC helpline to support businesses and individuals that have financial /cash flow issues in paying the

their taxes.

BAD NEWS FOR ENTREPRENEURS IN THE BUDGET 2020.

The lifetime limit for claiming entrepreneur’s relief was cut down by 90%.

Entrepreneur relief is a capital gain tax relief that is enjoyed by business owners that dispose off their business.

The tax relief if eligible is to pay tax at 10% rather than 18% or 28%.

This will make a lot of difference to business owners selling their business and receiving a lump sum.

One of the conditions is the lifetime limit that was 10millon pounds.

From this tax year, however, it has been changed to 1millon pounds.

This is a massive change that has been made to capital gains tax and business owners intending to sell their business.

This is implemented from the budget day!

MASSIVE JUMP FOR NATIONAL INSURANCE THRESHOLD.

Annual national insurance threshold was increased from £8632 to £9500 in the tax year 2020/20.

Taxpayers usually pay national insurance when they receive income over a certain threshold

This simply means that taxpayers that receive weekly income less than £183 weekly would not pay national insurance

Employees that receive monthly income under £792 would not pay national insurance

For Directors that are assessed on their yearly income, they wouldn’t have to pay national insurance until it goes over £9500.

The lower earnings limit also was increased to £6240.

This increase and changes in the threshold would give at least a savings of £104 for each tax year.

OTHER POINTS RAISED BY THE CHANCELLOR.

1. Increase in tapered pension allowance for high earner from £110,000 to £200,000.
2. The Chancellor announced a £5bn fund to bring gigabit-capable broadband to 95% of the country in the next five years.
3. Overseas property investors will now have to pay 2% extra stamp duty surcharge on residential property in England and Northern Ireland from tax year 2020/21. When they intend to let this property, they will have to pay an extra 3% in stamp duty. The stamp duty rates would be applied to the cost of the property when bought.
4. The chancellor also abolished the tampons tax and the reading tax.
5. Plug-in car grant that encourages taxpayers in buying green vehicles. This grant gives taxpayers a discount of £3500 when green vehicles are purchased.
6. The Chancellor also froze the alcohol duty on spirits, beers and ciders for 2020/21tax year

 

Conclusion on Budget 2020

If you would like to read more on Budget kindly click