UK Budget 2020: Key Points

Chancellor Rishi Sunak delivered his first Budget in the House of Commons yesterday, announcing the government’s tax and spending plans for the year ahead.

We have summarised the key points below.


Key Points

  • The Chancellor announced a £12 billion “temporary, timely and targeted” coronavirus stimulus on top of an £18 billion increase in general public spending, but tax measures were relatively few.


Corporate tax and business

  • It was confirmed the corporation tax rate will remain at 19% for 2020/21

  • Research & Development expenditure credit (RDEC) will rise from 12% to 13% from 1 April 2020

  • The introduction of a PAYE cap on the payable tax credit for SME R&D schemes has been delayed until 1 April 2021

  • The national insurance contributions employment allowance will increase from £3,000 to £4,000 from April 2020

  • From 6 April 2020, the employment allowance will only be available to smaller businesses who had an employer’s NI bill of £100,000 or less in the previous tax year


Capital allowances

  • From April 2021, only zero-emission vehicles will get 100% first-year allowances. Cars with emissions up to 50g/km will have an 18% a year writing down allowance; for higher emitters, the allowance will be 6% a year

  • The rate for Structures & Buildings allowance will increase from 2% to 3% from 1 April 2020 for corporate tax and 6 April 2020 for income tax


Personal tax

  • The tax threshold for national insurance contributions will rise from £8,632 to £9,500 from 6 April 2020

  • The pension annual allowance thresholds will each be increased by £90,000 from 2020/21, removing taper relief as an issue for most people with incomes under £200,000


Capital gains tax

  • The entrepreneurs’ relief lifetime limit has been cut from £10 million to £1 million with immediate effect


VAT

  • E-publications (e-books, e-newspapers, e-magazines and academic e-journals) will be VAT zero-rated from 1 December 2020

  • The 5% tax on women’s sanitary products known as the tampon tax is due to be scrapped


Other key points

  • A stamp duty surcharge of 2% will apply for all non-residents purchasing residential property in England and Northern Ireland from 1 April 2021.  This does not yet apply to properties in Scotland which are subject to LBTT for which no surcharge yet exists for non-residents

  • From April 2022, red diesel (and rebated biofuels) will only be available to users for agriculture, rail and non-commercial heating

Get in touch

If you have any queries about any of the changes mentioned in the budget and how this may affect you, please speak with your usual MHA Henderson Loggie contact or fill out the contact form below.