Rishi Sunak delivered his first Budget as Chancellor of the Exchequer, announcing the government’s tax and spending plans for the year ahead. We look at the key elements of the budget based upon information available immediately after the Chancellor’s Budget Statement. The Budget proposals are subject to amendment before the Finance Act receives Royal Assent. Please contact our tax team for further advice and the latest tax rates and information.
Key Budget Announcements
- A £30bn package has been announced to boost the economy and get the country through the coronavirus outbreak. This includes a £5bn emergency response fund to support the NHS and other public services in England. Small firms will be able to access “business interruption” loans of up to £1.2m and Business rates in England will be abolished for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000.
- £6bn in extra NHS funding is to be provided over five years to pay for staff recruitment and the start of hospital upgrades.
- The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500.
- 5% VAT on women’s sanitary products to be scrapped.
- Tax paid on the pensions of high earners, including NHS consultants, to be recalculated to address staffing issues.
- Fuel duty and duty on alcohol to be frozen.
- Tobacco taxes will continue to rise by 2% above the rate of retail price inflation.
- Entrepreneurs’ Relief will be retained, but lifetime allowance will be reduced from £10m to £1m.
- Capital Gains Tax annual exemption to increase to £12,300.
- VAT on digital publications, including newspapers, e-books and academic journals to be scrapped from December.
- Corporation tax rate will not reduce, remaining at 19%.
- Employment allowance on secondary Class 1 NIC to increase to £4,000.
- Additional investment allowance for plant and machinery reverts from £1m to £200,000.
A summary of the main tax rates and allowances for 2020/2021 can be found here. For all other information and tax planning opportunities, contact our tax team for the latest updates.
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