A quick update
We’ve prepared this brief note about matters from the 2020 Budget with only the stuff we hope will be of interest to clients of our firm – small organisations and individuals.
1. The annual Employment Allowance will be increased to £4,000 from April 2020. That’s an extra £1,000 off the National Insurance bill for all employers meeting certain basic conditions and designed to benefit small organisations
2. Statutory Sick Pay can be accessed from day one of illness if related to Coronavirus and self-certification can be done over the phone. For employers, you will be refunded the first two weeks of SSP in these circumstances.
3. The business rates relief being celebrated in the press currently only affects England & Wales (and NI) and so we watch this space for a decision for Scotland – it seems likely we’ll follow suit but will wait and see.
4. The amount available for full write off against profits for corporation tax for capital expenditure on most ordinary business assets (known as Annual Investment Allowance) is reducing from £1M to £200,000 from January 2021. Think about timing if you’re planning large expenditure.
5. Corporation Tax rate to stay at 19% for the next three years (and not, sadly for business owners, reducing to 17%)
6. Entrepreneur’s Relief is a reduction in tax on individuals selling their business (from 20% to 10%). The total value of business assets which can be disposed of at the lower rate will be £1M over your lifetime – down from £10M…
7. Informally known as the ‘Tampon Tax’ – VAT on women’s sanitary products will be zero-rated from January 2021. Side note: this is something the UK Government could not previously do while part of the EU.
8. VAT on e-publications (books, newspapers, magazines etc.) will be zero-rated to mirror their print based counterparts, this time from 1 December 2020
9. The point at which both employees and employers begin to pay National Insurance Contributions will be £9,500 from April 2020 meaning more net income for staff and a lower cost of employment for employers
10. And finally…First Year Allowances (full deduction against taxable profit in year of purchase) for zero emission vehicles confirmed to 2025 – to support the aim of reaching net zero greenhouse gas emissions by 2050.
The usual disclaimer – a guide like this shouldn’t be used as formal tax advice and is summarised so as to communicate basic points quickly. Going into all the ifs and buts on each point would make this (already slightly dry subject) just another Boring Budget Bulletin.
If you have any questions, please contact David and the team.