The Chancellor, Rishi Sunak, has delivered his first Budget. Here are the 2020 tax rates & proposed changes at a glance.
Personal Taxation – 2020/21
National Insurance contributions
The threshold for class 1 primary contributions paid by employees and the class 4 national insurance contributions (NICs) paid by the self-employed will increase from £8,632 to £9,500 for 2020/21.
From April 2021 employers will pay no secondary class 1 NICs in relation to veterans they employ that have left regular service.
This payment holiday will last for one year from the employment commencement date.
The class 2 NICs rate for the self-employed will increase from £3.00 per week to £3.05 per week from April 2020. Class 2 NIC is payable by 31 January following the end of the tax year.
Capital gains tax
From 6 April 2020, the annual exempt amount for individuals and personal representatives will increase from £12,000 to £12,300. For trustees of settlements, the annual exempt amount will increase to £6,150.
Pension tapered annual allowance
From 6 April 2020, threshold income will increase from £110,000 to £200,000. The adjusted income will increase from £150,000 to £240,000 and the minimum reduced tapered allowance will be decreased from £10,000 to £4,000.
National living wage
The national living wage applicable to over-25s increases by 6.2% from £8.21 an hour to £8.72 an hour from April 2020.
Residence nil-rate band
The residence nil-rate band for inheritance tax increases from £150,000 to £175,000 from 6 April 2020.
Business Taxation – 2020/21
Structures and buildings allowance
From April 2020, the structures and buildings allowance (SBA) will increase from 2% to 3%.
The main rate of corporation tax will now remain at 19% from 1 April 2020, despite original plans to reduce this to 17%. This remains the lowest headline rate in the G20.
Research and development relief PAYE cap
The introduction of the PAYE cap on the payable tax credit in the SME research and development scheme will be delayed until 1 April 2021.
Off-payroll working rules
As previously announced, the Government has completed a review of the reform to off-payroll working in the private sector and, as planned, the rules will be implemented on 6 April 2020.
With effect from April 2020, the employment allowance will increase from £3,000 to £4,000.
To read the full Spring Budget 2020, please click here
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