A summary of the situation

 In Analysis, Information, Legislation, Tax, VAT

The current health situation

  • 14 days of Statutory Sick Pay per employee to be met by the Government in full.
  • Business properties with rateable value less than £51,000 will pay no Business Rates.
  • The amount of the Cash Grant that was going to be £3,000 to certain Small Businesses, delivered by Local Authorities, is now to be £10,000.
  • The proposed changes to IR35 which were to start from 6th April 2020 will be deferred for one year.
  • Interruption Loans for Businesses will be provided by the Government.
  • The mechanism for delivery of Government help to business is not as yet in place. Further guidance on this point will follow as soon as possible.

Rates of VAT

  • Flat Rates the same as last year.
  • Annual Turnover limited for registration remaining at £85,000 per annum.
  • No VAT on Digital Publications. 

Corporation Tax and Capital Allowances

  • Rate of Corporation Tax remains at 19%.
  • The entire cost of additions to plant and machinery can normally be written off by Small Business against their profits.
  • Up till 31st December 2020 the maximum allowances you can claim are £1m per annum.
  • From 1st January 2021 it reduced to £200,000 per annum.
  • The full cost of Electric cars can be subtracted from your business profits for tax purposes.

Stamp Duty Land Tax

  • £0-125,000: 0%
  • £125,000-£250,000: 2%
  • £250,000-925,000: 5%
  • £925,000-£1.5m: 10%
  • £1.5m-: 12%

These Rates apply to England and Northern Ireland only. Scotland and Wales have different Rates. There are surcharges for properties other than your main residence.

* From 1st April 2021 there will be a 2% surcharge on residential properties purchased by Non UK Residents.

National Insurance

  • Earnings up to £9,500 per annum are free of NIC.
  • Self Employed Business profits up to £9,500 per annum are free of NIC.
  • Class 2 NIC for Self Employed now £3.08 per week.
  • Voluntary National Insurance Contributions are £15.30 per week.
  • Employee National Insurance rate 12%, and Employer National Insurance rate 13.8%.
  • Employment Allowance now £4,000 per annum (was £3,000).

Inheritance Tax

  • There are no changes to Inheritance Tax.
  • Estates are charged to tax at 40% on the excess over £325,000.

Capital Gains Tax

  • No significant changes to Capital Gains Tax rates.
  • Entrepreneurs Relief lifetime limit reduced to £1m.

Income Tax

No changes to Income Tax Rates or Tax Bands in England.

H M Revenue and Customs Administration

  • If you have problems paying your taxes you can call the HMRC Helpline, 0800 0159 559.
  • Due to pressure on H M Revenue and Customs currently, it seems most likely that all functions carried out by human beings may be significantly delayed. Please bear this in mind if you are waiting for a decision on anything.

– By Stephen Handley, FCCA

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