The UK Budget for 2020/21 was announced on 11 March 2020.
Coronavirus – Emergency relief measures
As a temporary measure to help business during the COVID-19 outbreak the statutory sick pay (SSP) will be extended to those advised to self-isolate to stop the spread of disease; and to those caring for others who are self-isolating. Businesses with fewer than 250 employees would be refunded for sick pay paid to staff in the first two weeks of sick leave.
Support will be given through the welfare system for those who cannot claim SSP. Self-employed workers required to self-isolate could claim the contributory Employment Support Allowance, and this would be available to them from the first day, rather than after one week as is normally the case.
There will be expanded relief this year from the Business Rates, the local property tax. Business rates will be cancelled altogether (for 2020/21 only) for businesses operating in the retail, leisure or hospitality sectors if the rateable value of the relevant property is below GBP 51,000.
Also there will be a GBP 500 million hardship fund available for use by local authorities.
A Coronavirus Business Interruption Loan Scheme will support up to GBP 1 billion additional lending to small and medium enterprises (SMEs). There will be a GBP 2.2 billion grant scheme for small businesses and a helpline for businesses needing to defer tax liabilities.
Corporation tax
The corporation tax rate remains the same at 19%.
The Research and Development (R&D) Tax Relief is to be improved by increasing the rate of R&D tax credits by a further 1% from 12% to 13% and by consulting on broadening the definition of qualifying expenditure to include data and cloud computing.
The Structures and Buildings Allowance, a capital allowance for businesses investing in offices, factories and some other types of business building, is to increase from 2% to 3%.
Income Tax
The threshold at which the income tax deduction for pension contributions begins to taper is increased from GBP 110,000 to GBP 200,000. The minimum annual allowance for pension contributions is to decrease to GBP 4,000.
National Insurance
The thresholds at which employees begin to pay national insurance contributions is being raised to GBP 9,500.
The Employment Allowance for employers is to increase from GBP 3,000 to GBP 4,000.
Capital Gains Tax
The lifetime allowance for the Entrepreneurs’ Relief is to be reduced from GBP 10 million to GBP 1 million.
Value Added Tax
The value added tax (VAT) on digital publications is to be reduced to zero from December 2020.
Business Rates
The Business Rates system is to be reviewed later in 2020. The business rate discounts for pubs are to rise from GBP 1,000 to GBP 5,000, for pubs with rateable value under GBP 100,000, for 2020/21 only.
Stamp duty
Stamp duty surcharge for foreign buyers of UK properties will be charged at a rate of 2% from April 2021.
Excise duty
Fuel duty is frozen again and duty is also frozen on spirits, beer, cider and wine. Tobacco duty will rise by 2% above inflation.
Environmental taxes
A Green Gas Levy is to be introduced to help fund the use of environmentally friendlier fuels. The Climate Change Levy is also to be increased in relation to gas.
A plastic packaging tax will enter into force from April 2022.
Tax Administration
The government will publish an evaluation of Making Tax Digital for VAT, together with related research.
