What can we expect from the 2020 Budget?
The Chancellor of the Exchequer, Sajid Javid, will deliver the 2020 Budget on Wednesday 11 March. With this in mind, here we consider some of the measures that may be announced.
No rise in income tax or VAT rates
In its election manifesto, the Conservative Party stated it is committed to building a tax system that ‘rewards entrepreneurship’ whilst ‘making sure everyone pays their fair share of tax’. The Conservatives promised not to raise the rates of income tax, national insurance (NI) or VAT in order to ‘protect the incomes of hard-working families across the next Parliament’.
An increase in the NIC threshold
In its election manifesto, the Conservative Party outlined plans to increase the national insurance contribution (NIC) threshold to £9,500 in 2020/21, with an ultimate ambition to ensure that the first £12,500 of earnings would be completely free of tax.
A rise in the Employment Allowance
The Conservatives pledged to increase the Employment Allowance for UK small businesses, representing a tax cut for half a million small firms.
A review of Entrepreneurs’ Relief
Speculation is rife that Entrepreneurs’ Relief (ER) could be reformed or even abolished at the 2020 Budget. In its election manifesto, the Conservative Party promised to review the relief with a view to reforming it and better supporting UK entrepreneurs.
Other proposals include:
A reduction in business rates
With the Chancellor recently announcing a reduction in business rates for public houses with a rateable value below £100,000, we could see the government take a further step and reduce business rates for high street retailers in the 2020 Budget. As many as 18,000 pubs are expected to benefit from the reduction.
Making Tax Digital
We may also hear about plans to extend Making Tax Digital for income and/or Corporation Tax. We do know that any such digitisation will not happen until after April 2020 (and therefore probably periods commencing 1/6 April 2021 at the earliest).
Brexit, of course may trigger taxation changes.
Here at Practice Track we have a comprehensive range of 2020 Budget products to keep your clients informed of all the key points arising from the Chancellor’s announcement. For more information, please contact our team via email or call us on 0800 181 343.