Here at Hamlyns we watched with great interest as Rishi Sunak delivered his first budget, below we have highlighted some of the key headline tax announcements and their impact on smaller businesses and individuals.

Response to Coronavirus

Statutory Sick Pay

For businesses with less than 250 employees, the government will fund SSP for two weeks. Statutory sick pay will be available to anyone advised to self-isolate from the first day rather than third.

Business Loans

Small and medium sized businesses impacted by the Coronavirus will have access to loans of up to £1.2m to support them with staff wages and other cash flow impacts.

Business Rates

Any business eligible for small business rates relief can claim a £3,000 cash grant.

The government will also abolish business rates for any business with a property with a rateable value of less than £51,000.

Many businesses in the leisure and hospitality sectors, not currently covered by this policy, will see this discount extended to them also.

National Insurance

For employees, the national insurance threshold will be raised from £8,632 to £9,500 per year.

For employers, the NI allowance will increase from £3,000 to £4,000 per year.

Employers will also be able to claim relief on NI for the employment of veterans.

Entrepreneurs Relief

The lifetime allowance is being reduced from £10,000,000 to £1,000,000.

R&D Tax Credits

Under the large company scheme, the rate claimable will be up from 12% to 13%.

Widening the definition of qualifying expenditure to include data and cloud computing will also be consulted.

Corporation Tax

The plan to reduce Corporation Tax to 17% has been abolished. Corporation Tax will now remain at 19%.

Structures and Buildings Capital Allowance

The rate claimable for structures and buildings capital allowances will increase from 2% to 3%.

Pension’s annual allowance

The amount of income at which tapering of the annual allowance occurs has been raised to £200,000, an increase of £90,000

The minimum annual allowance has now been reduced to £4,000 per year.

National Living Wage

The national living wage will increase to £10.50ph by 2024.

VAT on Digital Books/E-Books

From 1 December – books, newspapers, magazines or academic journals will have no VAT charge.

Plastic Packaging Tax

A plan to charge £200 per tonne of plastic packaging that does not contain 30% recycled plastic

This policy has an implementation date of April 2022.

Summary

As we continue to delve into the detail of the 2020 Budget, we will add further key points to our social media and website. Should you wish for advice on the implications of any of the above do get in touch.

Andrew Douthwaite

Manager, Hamlyns LLP

For information of users: This material is published for the information of clients, contacts and prospects of Hamlyns. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.