WELCOME TO OUR FINANCE JUNGLE

Chancellor Rishi Sunak delivered a budget on 11th March 2020, which was dominated by the coronavirus outbreak. He announced £30bn package of emergency to mitigate the economic impact of Covid-19 with other major investment plans to level up the country’s economic situation.

We will highlight the important points from tax and accounting point of view;

 Statutory sick pay: Prime Minister has announced the Covid-19 Bill which will allow SSP to be paid from first day of sickness rather than the fourth day of sickness.

Small & Medium size business will be able to recover SSP under Covid-19 bill under certain conditions.

Government will grant £3000 to £700,000 to those business who are currently eligible for small business relief or rural rate relief.

Business Tax

Capital Allowances;

Structures & Building Allowance SBA): This will be increased to 3% from 1st April 2020.

Capital Allowance for Business Cars: The first year allowance on zero emission vehicles will be extended from April 2021. 18% of Writing Down Allowance (WDA) will apply to cars with emissions up to 50g/km.

 

Entrepreneurs’ Relief:

The lifetime limit on gains has now reduced to £1m from £10m from 11th March 2020.

Intangible Fixed Asset Regime: Tax relief will be provided on or after 1st July 2020 for the cost of acquiring corporate intangible assets under a single regime. This will be subject to restrictions.

Research & Development:

  • The RDEC rate will increase to 13% from 1st April 2020.

Employment Allowance: This will be increased to £4000 (from £3000) from April 2020.

Corporation Tax Rate: Tax will remain on same rate of 19% in year 2020.

Digital Service Tax (DST): 2% tax will be implemented to revenue certain digital businesses from 1st April 2020.

Corporate Capital Loss Restriction: From 1st April the proportion of annual capital gains that can be offset with brought forward capital losses will be restricted to 50%.

Property Tax

Stamp duty surcharge for Non-UK: 2% of stamp duty land tax will apply to non-uk residents if they purchase residential property in England and Northern Ireland from 1st April 2021.

Business rates: The Business rates in England will be abolished for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000.

On the other hand, business rate discounts for pubs will rise from £1,000 to £5,000 this year from 1st April 2020.

 

Personal Tax

National Insurance tax threshold will rise from £8,632 to £9,500.

The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500

Tapered Annual Allowance for Pensions: The tapered annual allowances threshold will be raised by £90,000. From 6th April 2020, the minimum tapered annual allowance will be decreased from £10,000 to £4,000.

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Indirect Taxes

VAT:

  • Digital Publications: From 1st December 2020, a zero rate of VAT will apply to e-publications.
  • Women Sanitary products: From 1st Jan 2021 there will be no VAT on these products.

 

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