Today the Chancellor Rishi Sunak presented his first budget as Chancellor of the Exchequer amid fears for the Coronavirus and the global economy. The Chancellor believes that this is a budget for ‘Challenging Times’. To mitigate what effect which the Coronavirus may have on the economy this is a budget of fiscal stimulus with some amendments to current legislation.
Personal Tax
Entrepreneurs Relief currently provides tax relief on the sale of a business or shares in an individual’s personal trading company. Such a company is one where at least 5 % of the ordinary share capital, voting rights and other specified rights are held. The relief reduces the rate of capital gains tax to 10% on lifetime disposal of up to £10 million. From today, this relief is restricted to gains of £1 million.
Pension relief has also been revised so that those who earn up to £200k can receive relief on premiums paid up to £40,000, this is adjusted where income is exceeds £240k . For the highest earners earning more than £300k, the annual allowance will be reduced from £10k to £4k.
From April 2021, there will be a Stamp Duty surcharge of 2% on any purchase of UK residential property by non UK residents.
Business Tax
It should be remembered that from 6 April, property businesses will be subject to corporation tax (confirmed to be held at 19%) rather than income tax.
A review of the UK funds regime will be undertaken to consider whether tax changes could be made to make the UK a more attractive location for funds. Assistance will be provided to businesses in the retail and leisure sector who may be adversely affected by the Coronavirus who have business rates of less than £50k p.a. so that their business rates will in some cases be reduced to zero.
Employers who have less than 250 employees will be refunded in full for any statutory sick pay paid to employees for up to 14 days where they are affected by the Coronavirus. In addition, statutory sick pay will be paid from day 1 rather than 4 and will be available for persons advised to self-isolate. Business employment allowance has been increased from £3,000 to £4,000.