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Budget 2020 on a page

Budget 2020 on a page

Following the Chancellor's Budget, we have compiled the key announcements for businesses, employers and individuals.

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Melissa Geiger

Partner, Head of International Tax and Tax Policy

KPMG in the UK

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Our 'on a page' document covers all the key measures from Budget 2020.

Download our quick guide to the Budget, covering the big topics for businesses, employers and individuals.

Businesses

  • From April 2021 large businesses will have to notify HMRC of tax treatments relying on an uncertain legal interpretation which HMRC is likely to challenge;
  • Confirmation that the two percent Digital Services Tax will be introduced from April 2020;
  • Rate of the Research and Development Expenditure Credit (RDEC) will increase to 13 percent from April 2020;
  • Annual rate of relief for Structures and Buildings Allowance will increase to three percent from April 2020;
  • Tax relief will be available for acquisitions from July 2020 of pre-April 2002 intellectual property from overseas companies;
  • Plastics Packaging Tax of £200 per tonne to apply from April 2022; and
  • Temporary measures will be introduced from April 2020 to extend business rates relief, primarily applying to smaller businesses.

Employers

  • Employment Allowance for NICs increased to £4,000;
  • 2024 target for the National Living Wage set at two thirds of median earnings, equivalent to a rate today of £10.50 per hour;
  • Small and Medium Enterprises (SMEs) will be able to reclaim 100 percent of Statutory Sick Pay paid for 14 days per employee from the Government due to the coronavirus crisis;
  • Expansion of the availability of the “Time to Pay” tax deferral arrangements for businesses impacted by the coronavirus crisis; and
  • Measures to prevent non compliant businesses from using the Construction Industry Scheme to claim refunds.

Individuals

  • Entrepreneurs Relief lifetime allowance reduced to £1million from £10 million immediately;
  • Despite speculation, no other major changes to Inheritance Tax or Capital Gains Tax were announced;
  • The taper threshold for pensions tax relief raised by £90,000 - this should now only impact individuals earning in excess of £200,000 per annum;
  • Stamp Duty Land Tax (SDLT) surcharge of two percent introduced for non residents buying UK residential property;
  • National Insurance threshold for employees and the self employed increased to £9,500;
  • Freeze on fuel and alcohol duties; and
  • Reduction of Value-Added Tax (VAT) rate to zero percent on digital publications and female sanitary products.

Key rates

  • Corporation Tax Rate maintained at 19 percent from April 2020
  • Employer and Employee NIC rates unchanged
  • Income Tax, Dividend Tax, Capital Gains Tax rates unchanged
  • Personal Allowance £12,500, 40 percent tax threshold £50,000 
  • National Living Wage increases to £8.72 from April 2020
  • No change in VAT rates or thresholds
  • Pension Lifetime Allowance increases to £1.073 million. Annual Allowance remains at £40,000

© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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