Tax measures in the 2020 Spring Budget


Posted by Cathrine Bryant, 11th March 2020
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Tax expert and Blake Morgan partner Cathy Bryant looks at this afternoon’s Spring Budget announcement with a focus on the tax measures. Rightly, there was a heavy focus on what measures the government would be taking to support the economy, business and individuals as the full impact of COVID-19 becomes evident.

There are a number of tax measures which support the COVID-19 response and these are included in our headline summary below.

Businesses

  • Business Rates will be abolished in England for the retail, leisure and hospitality sectors for one year;
  • A specific Business Rates discount for pubs will this year be equal to £5,000;
  • At the same time, the Chancellor has announced a review into Business Rates overall and is set to report in the autumn;
  • Corporation Tax remains unchanged at 19%;
  • Entrepreneurs’ Relief will be amended to reduce the lifetime limit on gains which benefit from the 10% tax rate to £1 million with effect from 11 March 2020;
  • The annual rate of the structures and buildings capital allowance is increasing to 3%;
  • The R&D Expenditure Credit is increasing from 12% to 13%;
  • The Digital Services Tax announced in the 2018 Budget will be implemented with effect from 1 April 2020.

Employment

  • IR35 will be implemented on 6 April 2020;
  • The tax threshold for National Insurance Contributions is increasing to £9,500 with effect from the new fiscal year;
  • Employers taking on veterans will be entitled to a National Insurance Holiday for the first year of employment;
  • The Employment Allowance is increased to £4,000;
  • The two Tapered Annual allowances for pensions will be increased by £90,000 so that the threshold income will be £200,000;
  • The government has announced a review into the way in which the EMI scheme operates.

Property

  • There will be a new 2% SDLT surcharge on non-UK residents purchasing residential property in England and Northern Ireland with effect from 1 April 2021.

VAT

  • VAT on e-publications will be adjusted to a zero rate with effect from 1 December 2020;
  • VAT on women’s sanitary products will be abolished from 1 January 2021.

Tax Avoidance

  • A number of measures have been announced to tackle tax avoidance across a number of sectors of the economy, estimated to raise an additional £4.7 billion in tax.

If you require legal advice on tax measures, speak to Cathy Bryant or another member of our corporate and business tax team.

 

 

 

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