BUDGET 11 MARCH 2020 – key points
Chancellor Rishi Sunak delivered his first Budget, and the first since the UK’s departure from the European Union, against the backdrop of the coronavirus outbreak.
Measures to mitigate the impact of Coronavirus
- £12 billion package of tax and spending measures including grants and hardship funds for people and businesses affected
- Statutory Sick Pay to be payable from first day’s absence and fully funded by the Government for 14 days; support also for workers in gig economy and self-employed, and relaxed conditions for those who self-isolate
- Business rates relief for the next year increased from 50% to 100% for retail businesses with rateable values up to £51,000; this relief extended to leisure and hospitality businesses as well, and further relief for small pubs
- Small businesses already eligible for 100% rates relief to receive £3,000 cash payment
- Businesses and individuals with cash flow difficulties promised ‘Time to Pay’ their taxes with a dedicated HMRC helpline
Tax measures with immediate effect
- Lifetime limit for gains eligible for Entrepreneurs’ Relief (taxed at 10% instead of 20%) reduced from £10m to £1mfor disposals from Budget day
- Duties on alcoholic drinks and fuel frozen
Tax year 2020/21
- No changes to personal income tax allowances and rates: 2019/20 figures continue for a second year, as expected
- Increase in threshold for National Insurance Contributions from £8,632 to £9,500
- Increase in thresholds for ‘Annual Allowance pensions taper’ from £110,000 and £150,000 to £200,000 and £240,000
- Lifetime Allowance for pensions increased in line with inflation to £1,073,100
- ISA allowance remains £20,000 per year, but Junior ISA/Child Trust Fund limits rise from £4,368 to £9,000
- As announced in advance, Corporation Tax rate remains 19% rather than being reduced to 17%
- No changes announced to ‘off-payroll working’ (IR35) rules, so they will apply to larger private sector employers from 6 April 2020 as previously announced
- No change announced to new rules for reporting and paying CGT on chargeable residential property, so deadline becomes 30 days
- Employment Allowance for small businesses increased from £3,000 to £4,000 of Employers’ NIC
- Research & Development expenditure credit increased from 12% to 13%
- Structures and Buildings Allowance increased from 2% to 3%
Tax measures coming into effect later
- VAT ‘Domestic Reverse Charge’ on construction services, deferred from 1 October 2019, confirmed for introduction on 1 October 2020
- VAT zero-rating to apply to digital versions of newspapers and books as well as printed versions from 1 December 2020
- Abolition of VAT on women’s sanitary products from 1 January 2021
- VAT on imports to be dealt with by ‘postponed accounting’ (on the VAT return, not on the docks) by businesses from 1 January 2021
- Stamp Duty Land Tax surcharge of 2% introduced for non-resident buyers of UK property from 1 April 2021
- Tax relief on ‘red diesel’ removed for most sectors but retained for agriculture, home heating and rail in April 2022
- New plastic packaging tax for manufacturers in April 2022, as well as a shift in Climate Change Levy from electricity to gas
Read full budget here: SKS Budget Summary
Essential Tax Dates for March 2020
1 March 2020 – Due date for Corporation Tax due for the year ended 31 May 2019.
2 March 2020 – Self assessment tax for 2019/19 paid after this date will incur a 5% surcharge.
19 March 2020 – PAYE and NIC deductions due for month ended 5 March 2020. (If you pay your tax electronically the due date is 22 March 2020)
19 March 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 March 2020.
19 March 2020 – CIS tax deducted for the month ended 5 March 2020 is payable by today.