Budget quick round-up
Independent Practitioner Today Budget Special:
In the first Budget of the decade and the first one in over 50 years outside of the EU, new Chancellor Rishi Sunak appeared to unveil – against the backdrop of the ever-growing Coronavirus outbreak – a series of giveaways. This was headed by a £30m investment to mitigate the impact of the virus.
In a further apparent loosening of the purse strings, initiatives were announced to boost small businesses and tackle climate change.
These changes will be partly funded by a reduction in Entrepreneurs’ Relief lifetime limit from £10m to £1m and from the abandonment of the reduction of corporation tax rate from 19% to 17%.
Other main changes included:
- For this year, business rates in England will be abolished for eligible businesses in the retail, leisure and hospitality sectors with a rateable value below £51,000
- Also for this year, a £3,000 cash grant per business that is currently eligible for the small business rates relief, as well as an increase in the business rate discount for pubs from £1,000 to £5,000
- Increasing public investment in R&D to a record £22bn a year
- Increasing the rate of Research & Development Expenditure Credit from 12% to 13%
- An increase in the National Insurance Contribution’s Employment Allowance, from £3,000 to £4,000 – effective from April 2020 – plus an increase in the NIC threshold to £9,500 for employees
- Small firms will be able to access ‘business interruption’ loans, up to £1.2m
- Increase in capital allowances – structures and buildings allowance – from 2% to 3% per annum
- VAT on digital publications to be abolished from 1 December 2020
- Continued focus on tackling aggressive tax avoidance
- Improved ‘Time to Pay’ arrangements to help taxpayers affected by COVID-19
- Tapered allowance threshold for pensions tax relief will increase by £90,000 to £200,000 to help NHS staff, so individuals with income below this level will not be affected by the tapered annual allowance
The Chancellor said he intended this Budget to promote a feeling of ‘security today’ and ‘prosperity tomorrow’. The Budget small print will no doubt reveal more later….
Analysis by LAS Accountants LLP