This year’s budget heavily focused on the steps to relieve the NHS and businesses amid the coronavirus outbreak.
However, the Chancellor’s annual Budget announcement also included some key notes for businesses for the tax year ahead.
What Is The Budget Announcement?
The Budget is the big announcement at the start of the tax year, where the government outlines the financial changes moving forward.
In this blog we’ll explain how these changes will impact businesses like yours.
There will be a 100% business rates discount for 12 months starting 1st April 2020.
This discount applies to any retail, leisure or hospitality business with a rateable value below £51,000.
This comes as a stop gap measure before a full review into business rates happens later this year.
Local authorities will be fully compensated for the loss of income as a result of this 12 month temporary fix.
It was announced that there will be a reduction to the £10million lifetime limit on eligible gains to £1m.
The government has said that 80% of small businesses would be unaffected by this change, yet it is estimated to save the country £6bn over the next 5 years.
The standard rate of corporation tax will be held at 19% for the next 2 financial years.
From 1st April there will be a 50% restriction in place for how much chargeable gains companies can offset against their brought forward capital losses.
Employment Allowance will be increased to £4000 from April 6th 2020.
Businesses and charities will be able to claim the increased reduction on their employer secondary class 1 NICs.
Digital Service Tax
The controversial digital service tax Is moving forward, despite pushback from the USA.
In essence, the government is taking on Facebook, Google & Amazon with a new tax on social media services, search engines and online marketplaces to UK customers.
Plastic Waste Levy
In a move that will impact many businesses, from April 2022 there will be a charge of £200 per tonne for manufacturers and importers whose packing is made up of less than 30% of recycled plastic.
National Insurance Thresholds
The government has announced that they will increase NIC from £8,632 to £9,500.
This will remove 1.1 million people from Class 1 and Class 4 NIC altogether, saving employees £104 a year and the self-employed £78 a year.
The Bank of England has cut the base lending interest rate from 0.75% to 0.25%, which is a historic low.
VAT Rates On Digital Books
The VAT rate on digital books and publications is set to be scrapped from December 2020.
After many years of pushback, the tampon tax is set to be brought down from 5% to 0%.
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