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As the 2020 Budget was revealed yesterday, here are some important snippets from what was decided… 

Pensions
– Call for evidence on pension tax administration: those earning around or below the level of the personal allowance and saving into a pension may benefit from a top-up on their pension savings equivalent to the basic rate of tax, even if they pay no tax. This depends on how your pension scheme administers tax relief.

– Lifetime allowance for pensions: the maximum amount someone can accrue in a registered pension scheme in a tax-efficient manner over their lifetime is increasing in line with CPI for 2020-21 rising to £1,073,100.

Savings
– Starting rate for savings tax band: the band of savings income subject to 0% starting tax rate will remain at its current level of £5,000 for 2020-21.

– Individual Savings Account (ISA) annual subscription limit: the adult ISA annual subscription limit for 2020-21 will remain unchanged at £20,000.

– Junior ISA and Child Trust Fund annual subscription limit: the annual subscription limit for Junior ISAs and Child Trust Funds will be increased from £4368 to £9000.

Property Tax
– Non-UK resident Stamp Duty Land Tax (SDLT) surcharge: the government will introduce a 2% SDLT surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1st April 2021.

– Annual tax on Stamp Duty Land Tax (SDLT) – to make the taxation of housing co-operatives fairer, the government will introduce a relief for qualifying housing co-operatives from the ATED and the 15% flat rates of SDLT on purchases of dwellings over £500,000. The SDLT relief will take effect from Autumn Budget 2020.

VAT on E-Publications
The government will introduce legislation to apply a zero rate of VAT to e-publications from 1st December 2020.

Entrepreneurs Relief
Will not be abolished, it will instead be reduced from £10million to £1million. It will continue to support most entrepreneurs and increase tax incentives for businesses investing in structures and buildings.

National Insurance Threshold
The NI threshold will rise from £8632 to £9500 saving a typical employee £104 annually. This also applies to self-employed, saving them around £78 in 20-21.

National Minimum Wage
To reach two-thirds of median earnings and be extended to workers aged 21 and over by 2024, meaning the national minimum wage is expected to be over £10.50 in 2024.

Employment Allowance
The employment allowance is increasing from £3,000 to £4,000 from April 2020. This will benefit over 500,000 businesses by reducing costs of employment, and an average gain of £850 per year.

By |2020-03-12T12:30:09+00:00March 12th, 2020|News|