Rishi Sunak gave an assured performance in his first budget speech which was understandably dominated by the potential threat of the coronavirus on the economy. Amongst the large package of spending measures the tax announcements were surprisingly few and far between given that many were expecting a new government with a large majority to take the opportunity to introduce changes and get some of the more difficult news out of the way early on in its cycle.
Many of the tax announcements were already widely anticipated but here are a few of the highlights:
- Entrepreneurs relief – Despite calls from many sides of the political spectrum to completely abolish entrepreneurs relief, the government instead reduce the lifetime limit from £10m to £1m which takes us back to the level at which it was first introduced in 2008.
- Stamp Duty Land Tax (SDLT) – Many were hoping for an easing of the currently high SDLT burden, but the only announcement was a new surcharge of 2% on non-residents purchasing UK residential property will apply from April 2021. This is currently planned to apply to partnerships and trusts where at least one member is non-resident so may catch some people by surprise.
- Pension – There was no raid on pensions this year as some had been speculating. However, the tapering of pension relief for higher earners was significantly eased at least partly in response to NHS doctors and consultants complaining that it was making taking on extra work uneconomical.
- Corporation tax – Corporation tax which had previously been due to fall to 17% this April has been kept at 19%.
- Personal tax allowances – The personal tax allowance has remained unchanged at £12,500 but as already announced the lower national insurance threshold has been increased to £9,500.
These are just some of the announcements made yesterday. To read more please see our budget summary at the top of this page or download the PDF document.