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.
- 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.
- 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.
- 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 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.
- 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.
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