March 2020 Budget

The Personal Allowance and the Higher Rate Band threshold will remain unchanged at £12,500 and £50,000 respectively.

From 11th March 2020, the lifetime limit for Entrepreneurs relief will be reduced from £10 million to £1 million.

The National Living wage will see a 6.2% increase from £8.21 to £8.72 an hour from April 2020.

The Dividend allowance is unchanged at £2,000.

The Corporation Tax rate will stay the same at 19%.

From April 2020, if you sell a residential property in the UK you’ll have 30 days to report any gains to HMRC and pay any Capital Gains Tax due.

As expected, IR35 reforms will continue to be extended to the Private Sector as of April 2020.

Companies will be able to claim £1m as AIA for expenditure incurred from 1 January 2019 to 31 December 2020. No announcement was made on extending the date and if unchanged, it will fall to £200,000.

 

Small and medium-sized businesses and employers to cope with the extra costs of paying COVID-19 related SSP will be refunded for eligible SSP costs. This refund will be limited to two weeks per employee

 

The allowance was increased to £4,000 but is no longer universal with several conditions applying. Including that from April 2020, this will be limited to employers with an employer NICs bill below £100,000 in the previous tax year.

 

From April 2020 the maximum flat rate Income Tax deduction available to employees to cover additional household expenses has been increased from £4 to £6 per week where they work at home under homeworking arrangements.

 

From 6 April 2020, the adjusted income limit will rise to £240,000 (increased from £150,000) and the threshold income limit will rise to £200,000 (increased from £110,000). For higher earners the government also reduced the minimum reduced annual allowance that you can have under the tapering rules from £10,000 to £4,000.

 

Research & Development Expenditure Credit (RDEC) rate increases from 12% to 13% from 1 April 2020. The changes to the PAYE cap on the payable tax credit in the SME R&D schemes has been delayed until April 2021.

From 1 April 2020, there will be a new 2% digital services tax on the revenues of search engines, social media services and online marketplaces which derive value from UK users, when the group’s worldwide revenues from these digital activities are more than £500m and more than £25m of these revenues are derived from UK users.

 

If you have any queries with any of the points above, please contact your dedicated accountant.