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The 2020 Budget – Personal Tax

Income tax and National Insurance

The personal allowance is £12,500.

With the higher rate of 40% becoming effective on income above £50,000.

The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500.

Non-UK Residents
Will see new stamp duty surcharge at a rate of 2%, effective from April 2021

Statutory Sick Pay (SSP)

Self employed workers will be able to claim SSP from day one and will have access to the Contributory Employment and Support Allowance.

Deferral of tax payments

Self-employed business owners will be able to defer tax payment over an agreed period of time today. There will be a dedicated helpline with 2,000 staff standing ready to help. Due to the Coronavirus outbreak.

Stamp Duty Land Tax

First Time Buyer’s Relief in England and Northern Ireland will be extended so that all qualifying shared ownership purchasers can benefit, even if they have not elected to pay SDLT on the full purchase price ofthe property. This is backdated to include purchases since 22 November 2017.

Non-UK Residents

Will see new stamp duty surcharge at a rate of 2%, effective from April 2021

Capital Gains Tax
– Entrepreneurs Relief

The reform will see the annual lifetime allowance reduced from £10m to £1m.

– Lettings Relief

Lettings relief can reduce capital gains tax due on the sale of a property as you can claim up to £40,000 individually or up to £80,000 if a partner or spouse jointly owns the property.

The final period of exemption relief can be applied to a property up for sale, provided the property is sold within 18 months of the owners moving out. The final period of exemption will be reduced to 9 months, and it will increase the capital gains tax liability for anyone selling their main residence and who has accrued a period of private residence relief.

Pensions

The taper annual allowance threshold increased to £200,000 from £110,000. Also the minimum amount that can be tapered has been reduced from £10,000 to £4,000.

About Pennyhills®

London based Accountants specialising in accounting and tax solutions for Entrepreneurs, with their businesses, across the UK

We are a Silver-status partner with Xero and our practice regulated by the Association of Chartered Certified Accountants (ACCA).

We are authorised by ACCA to carry out a range of investment activities.

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