With all that’s going on with the COVID-19 situation, it is worth remembering that before those announcements the budget took place on 11 March. SFB are here to help you with anything that affects you and maximise the budget opportunities and minimise its cost affects.
- Entrepreneurs’ Relief lifetime limit has been reduced from £10 million to £1 million. This will apply to qualifying disposals made from 11 March 2020.
Capital Gains Tax For Residential Properties
If you live in the UK, you will need to report and pay Capital Gains Tax within 30 days when, for example, you sell or otherwise dispose of:
- a property that you’ve not used as your main home.
- a holiday home.
- a property which you let out for people to live in.
- a property that you’ve inherited and have not used as your main home.
But you won’t have to make a report and make a payment within 30days when:
- a legally binding contract for the sale was made before 6 April 2020.
- you meet the criteria for full Private Residence Relief.
- the sale or disposal was made to a spouse or civil partner.
- the gains (including any other chargeable residential property gains in the same tax year) are within your tax free allowance.
- you sold the property for a loss.
- the property is outside the UK.A new online service is being launched by HMRC to allow the reporting and payment of any CGT that may fall due.
These transactions may still need to be reported on your self-assessment tax return.
Please note that if you require SFB Group’s help with any CGT residential property disclosures that this will not be included in your annual tax return fee and may incur an additional cost. Please contact our tax department for more information.
- The proposed enhance IR35 regulations have been delayed and will not come into effect until April 2021.
- There are technical changes and a new rate of Structures and Buildings Allowance
- There has been an update to Top Slicing Relief legislation, clarifying the position on the ordering of reliefs and allowances. The measure also allows reduced personal allowances to be reinstated for the Top Slicing Relief calculation.
- This maximum Employment Allowance by has increased to £4,000 from April 2020, enabling eligible businesses and charities to be able to claim a greater reduction on their Secondary Class 1 National Insurance contributions liability.
- The threshold for National Insurance will rise to £9,500 per year. A typical employee will save around £104 in 2020-21, while self-employed people, who pay a lower rate, will have £78 cut from their bill.
- The government has sought to address non-compliance with the off-payroll working rules, who pay generally the same Income Tax and National Insurance Contributions as other employees, by extending similar reform to medium and large-sized organisations across all sectors
- Changes to the Loan Charge will benefit those that have made, or are due to make, certain voluntary payments to HMRC under a final settlement agreement.
- From 1 December 2020, a zero rate of VAT will be applied to e-publications, which will make it clear that e-publications (e-books, e-newspapers, e-magazines and academic e-journals) are entitled to the same VAT treatment as their physical counterparts.
- From 1 January 2021, postponed accounting for VAT will apply to all imports of goods, including from the EU. This will allow businesses to account for VAT on imports through their periodic VAT return as opposed to having to pay that VAT at the UK border.
- The government will publish an evaluation of the introduction of Making Tax Digital for VAT, along with related research.
- Changes to Pension Tax were announced, with an increase to the two income thresholds used in calculating the tapered annual allowance and decreases the minimum tapered annual allowance.
- The Pension lifetime allowance for 2020 to 2021 will increase to £1,073,100.
- There will be changed to tax legislation so that collective money purchase pension schemes (CDCs) can operate as registered pension schemes.
Research & Development Relief
- The R&D Expenditure Credit will increase to 13%.
- All new cars provided to employees and available for private use that are first registered from 6 April 2020 will be taxed according to the CO2 emissions figure.
- The government intend to remove the entitlement to use red diesel and rebated biofuels from April 2022, with the exception of agriculture, rail and non-commercial heating.
- The government confirmed that the Finance Bill 2020-21 will legislate for a 2% surcharge to take effect from 1 April 2021 on non-UK residents purchasing residential property in England and Northern Ireland.
- The government is stopping the export of Child Benefit payments made in respect of children living overseas. This will apply to EEA migrants arriving in the UK under the new immigration system from January 2021.
- From April 2021 for employers that hire former members of the UK regular armed forces, there will an exemption for any NICs liability on veteran’s salary up to the Upper Earnings Limit in their first year of civilian employment.
- Digital Services Tax will impose a tax on the revenue receive from providing social media services, search engines and online marketplaces to UK users.
- The maximum flat rate tax deduction for homeworking has increased to £6 per week.
- Further key decisions on the design of the Plastic Packaging Tax were announced ahead of its commencement in April 2022.
- There will be changes to Income Tax automation, strengthening the legal position of late filing penalties issued through automated processes.
It is worth noting that some of these budget announcements may change with the ongoing COVID-19 situation.