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Key takeaways from the Chancellor’s 2020 Budget

For a quick overview of the key points from the Chancellor's Budget on 11 March 2020, here are the key takeaways.

Updated 4 May 2020

If you are short of time but want a quick overview of the implications from the Chancellor's Budget on 11 March 2020, our specialist team have compiled a list of the key takeaways.  For more detail, visit our comprehensive overview , download our 2020 Budget Summary pdf Guide or contact one of the team.

 

Pensions, Savings and Investments

For pension contributions the taper thresholds are to be increased by £90,000. From 2020/21, for ‘threshold income’ it will be £200,000, and for ‘adjusted income’ £240,000. This will help many, such as medical consultants, who have faced large tax bills on extra pay. However, from 2020/21 the annual allowance of £40,000 is tapered by £1 for every £2 the adjusted income exceeds the threshold, to a minimum of £4,000 (previously £10,000).

Top-slicing relief on life policy gains is to be clarified, reflecting the taxpayer’s successful Tribunal decision, for gains arising from 11 March 2020.

 

National Insurance

The annual threshold for employees’ and self-employed National Insurance contributions is raised to £9,500 from April 2020.

 

Businesses

 

Coronavirus support for Businesses

Business rates – Recognising the potential effect on the economy of the coronavirus outbreak, there are substantial reductions. The retail discount is increased to 100% for 2020/21 and extended to leisure and hospitality sectors.

Those employers with fewer than 250 staff will be able to reclaim 100% employees’ first two weeks’ statutory sick pay resulting from COVID-19 (coronavirus).

A new £1.2bn business interruption loans fund for small businesses.  Banks will provide these loans (of up to £1.2m per eligible business), with an 80% Government guarantee backing the loans to deliver working capital.

 

Capital Taxes

Entrepreneurs’ relief – the lifetime limit is cut from £10 million to £1 million with effect from 11 March 2020. There was no reference to Investors’ Relief, which is also at 10% on a lifetime limit of £10 million.

 

VAT

 

Property

 

Frozen duties

 

Inheritance Tax

The Chancellor made no reference to implementing the changes to inheritance tax recommended by the Office of Tax Simplification.

 

For further information and advice, please talk to your usual Shipleys' contact or call one of our offices

London: t +44 (0)7312 0000  e: advice@shipleys.com

Godalming: +44 (0) 1483 423607  e: godalming@shipleys.com

 

This Budget Summary is based on the Chancellor’s Budget Statement on 11 March 2020, supplemented by information from official publications.

It reflects our understanding of proposed changes to tax law and practice at the date of publication, but is not a complete and definitive guide. The Budget proposals may be amended before the Finance Bill becomes law.

Specific advice should therefore be obtained before taking action, or refraining from taking action, on the basis of this information.

© 2020 Shipleys LLP

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