In the spring Budget, the first Budget since October 2018, newly appointed Chancellor, Rishi Sunak set out his and the government’s spending plans for the year ahead.
With the nation’s major concern being coronavirus, Rishi Sunak announced a number of measures that will directly benefit those affected by the outbreak. Setting a side £5bn funding for the NHS to deal with anything throw up by covid-19.
A brief overview of the Spring Budget
Statutory Sick Pay – individuals affected by coronavirus will be entitled to SSP from day 1 (not 4). This includes those advised to self-isolate.
Self-employed workers, not eligible for SSP will be able to claim contributory Employment Support Allowance. ESA will be available from day one.
Personal Taxation – the tax threshold for National Insurance contributions will increase to £9.500.
Personal Income Tax allowance stays at £12,500. There will be no change to the Income Tax bands, rates and dividend allowance from the 2019/20 year.
Capital Gains Tax Entrepreneurs’ Relief – Entrepreneurs’ Relief provides for a lower rate of Capital Gains Tax (10%) to be paid when disposing of all or part of a business where certain criteria are met, subject to a lifetime limit of £10 million of qualifying gains.
This measure reduces the lifetime limit from £10 million to £1 million for Entrepreneurs’ Relief qualifying disposals made on or after 11 March 2020.
There will be special provisions for disposals entered into before 11 March 2020 that are not yet complete.
Changes to annual exempt amount for CGT – the annual exempt amount will increase to:
- £12,300 for individuals
- £6,150 for trustees of settlements.
Corporation tax – despite the previous announcement that of a reduction from 19% to 17%, the rate will stay at 19%.
Employment Allowance increase – Employment allowance for National Insurance will increase to £4,000 from April 2020. This allows eligible businesses and charities to claim a greater reduction on their secondary class 1 National Insurance Contributions liability.
Structures and Building allowance – The annual writing down rate is to be increased to 3% from 2% as of April 2020.