Sunak’s new budget has several winners, losers and in certain instances no gain or loss. I have analysed each of the changes and categorized them as they affect me and my clients:
Winners
- Company Cars - electric company cars with a range of over 130 miles will be totally exempt as a benefit in kind.
- Homeworking – deductions to cover additional household expenses will increase from £4 to £6 per week from April 2020.
- Employment Allowance – increased from £3000-£4000 a year for 2020/2021. But restricted to employers with an employer Class I National Insurance Contributions bill of below £100,000 in 2019/2020.
- Tapered Annual Allowance for Pensions – the annual allowance threshold for pensions to be increased by £90,000 from 2020/2021.
- Lifetime Allowance for Pensions – increased in line with inflation to £1,073,100 for 2020/2021.
- Individual Savings Account (ISA) subscription elements – remain unchanged at £20,000, but annual subscription limit for junior ISAs and Child Trust Funds increased to £9,000.
- Structures and buildings allowance – annual capital allowances rates to increase from 2% to 3% from April 2020.
- Research and Development Credits will increase from 12% to 13% from 1 April 2020.
- First Year allowances for business cards – only zero emission vehicles will qualify for special allowances from April 2021.
- Business Rates - the retail discover properties with a rateable value below £500,000 in England would be increased to 100% for 2020/2021 and will include hospitality and leisure businesses for 2021.
- E-publications – e-books to be zero rated for VAT purposes from 1 December 2020.
Losers
- Off – payroll working (IR 35) – recent changes announced in relation to off payroll working rules (previously applicable to large and public sector entities) have been rolled out to smaller entities.
- Service company operator sin the private sector.
- Corporate Capital Loss Restriction – the amount of capital gains that can lead through brought forth capital losses will be restricted to 50% from 1 April 2020, subject to a maximum of £5 million each year.
- Non-Resident Property Companies – non-UK resident B charge corporation tax on their UK property income from 6 April 2020.
- Entrepreneurs Relief – the disposals after 11 March 2020 the lifetime limit on gains illegible for entrepreneurs relief will be reduced from £10 million to £1 million, this means gains above £1 million will no longer attract the 10% rate of CGT.
- Private Residence – relief – the final period of ownership for exemption from CGT is reduced from 18 months to 9 months from 6 April 2020.
- Lettings Relief – from 6 April 2020 the £40,000 lettings relief will only apply where the owner of the property shares occupancy with the tenant.
- Non-UK Resident SDLT – a 2% SDLT surcharge will be introduced from 1 April 2021 for nonresidents purchasing residential property in England and Northern Ireland.
No change
- Personal Allowances remain unchanged (£12,500)
- Higher Rate threshold to remain unchanged at £50,000
- Corporation Tax – the right to remain unchanged and 19%
- VAT – the registration threshold to remain unchanged at £85,000 until April 2022.
Winners, losers and indifferent – the results speak for themselves.
