Budget 2020: Budget Overview - PKF Francis Clark
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Budget 2020: Budget Overview

The Chancellor, Rishi Sunak, addressed the House of Commons today (11 March 2020) with his first ever Budget. As expected, there were no surprising measures announced and the budget basically delivered what was set out in the Conservative manifesto, which is in itself was light on content, with added measures aimed at helping overcome the economic risks of the current Coronavirus crisis.

Top things to know from the budget:

Individuals

  • Entrepreneurs’ relief lifetime limit on gains will reduce from £10m to £1m effective from 11 March 2020
  • A £90,000 increase in the pension annual allowance taper threshold
  • National living wage rate targeted to reach £10.50 by 2024
  • National insurance threshold increasing from £8,630 to £9,500 in April 2020
  • SDLT surcharge for non-UK residents of 2% from 1 April 2021

Businesses

  • Corporation tax will remain at 19% in April 2020 despite already being legislated that the rate will reduce to 17% from 1 April
  • An increase in the structures and buildings allowance rate from 2% to 3%
  • Research and development expenditure credit increased from 12% to 13%
  • Employment allowance increase from £3,000 to £4,000

Temporary measures

The business rates retail discount is increased to 100% for 2020-21 which will also be extended to leisure and hospitality sectors. A fundamental review of business rates will be reported on in the autumn.

Key measures were announced aimed at supporting individuals and businesses who have been affected by the Coronavirus outbreak. The measures are described as ‘timely, targeted and temporary’ and include:

  • Timely access to SSP/universal credits for both the employed and self-employed/gig-economy workers
  • Temporarily removing the income floor for universal credits
  • Creating a hardship fund to be distributed by local councils for vulnerable people
  • Temporarily refund eligible SSP costs for SMEs
  • Launch a temporary small business interruption loan scheme

Looking at the tax policy decisions, the biggest item is corporation tax staying at 19% and then entrepreneurs’ relief and national insurance. The other numbers are not actually that big.

Despite making these announcements today, in what is supposed to be the annual Budget, the Red Book clearly states that there will be a further Budget in Autumn 2020. A number of measures are subject to longer term review so what we have seen today is much like thinking that the withdrawal agreement is getting Brexit done – in fact there will be further reviews, consultations and changes which will be announced in the Autumn Budget.

FEATURING: John Endacott
John is the firm’s head of tax. He provides high level tax advice combined with commercial acumen in terms of managing and advising on personal… read more
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