2020 Budget Highlights

Treasury Chancellor Rishi Sunak has announced his 2020 Budget. Here is the summary of the key changes in the Budget: 

• Personal Allowance will remain at £12,500 in fiscal year 2020/21.
• Higher rate Threshold will remain at £50,000 in 2020/21.
• Corporation tax to remain at 19% from 1 April 2020. Plans to reduce the rate to 17% were scrapped in the Conservative party manifesto.
• The National Living Wage will increase in April 2020 from £8.21 an hour to £8.72 for the over 25’s.
• The annual exemption for capital gains tax will increase from £12,000 to £12,300 from 6 April 2020.
• The annual lifetime allowance for Entrepreneurs’ Relief will be reduced from £10m to £1m from 11 March 2020.
• From 6 April 2020, capital gain tax on residential property is to be declared and paid to HMRC within 30 days of completion.
• The inheritance tax threshold will remain at £325,000 with the additional residence nil rate band increasing from £100,000 to £175,000 in 2020/21. This allows an individual to pass on their property up to £500,000 with no IHT payable – or £1m per couple.
• Plans to introduce IR35 changes to the private sector from 6 April 2020 have been scrapped. The proposal has been deferred to 6 April 2021.

In summary, there are no major surprises in the Budget. The reporting of capital gains on residential property within 30 days may catch some taxpayers unawares and you should watch out for this.

A more detailed analysis of the Budget will follow. Please monitor the website for updates. Belsize Accountancy are specialist accountants for contractors and small businesses.