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

Global Leader, Strategic Corporates, Tax & Legal, KPMG International, and Partner and UK Board Member

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

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For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance.

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