Spring Budget 2020: How Will The Announcements Impact You?
The Spring Budget 2020 happened on 11th March, and there were a number of announcements that will impact the self-employed.
Join us as we explore it in more detail and highlight how these revelations will affect you.
It was expected – though not desired – that the IR35 reform would go ahead as planned. While the off-payroll working rules weren’t directly mentioned in Rishi Sunak’s speech, official Budget documentation revealed that it would proceed from 6th April as anticipated.
Whilst this does make the tax situation for some contractors more complicated, the burden can be relieved if you know exactly how the IR35 reform will impact you, plus the options available.
Another anticipation was that entrepreneurs’ relief would either be abolished or reduced. It was announced that the lifetime limit would decrease from £10 million to £1 million.
National Insurance contributions (NICs)
It was predicted that the threshold for NICs would rise from £8,632 to £9,500 – and this is what prevailed in the budget.
In the Autumn 2018 Budget, it was revealed that Personal Allowance would be increased to £12,500 in the 2019/20 tax year. This threshold will remain for the 2020/21 and 2021/22 tax years.
There was an increase for the Employment Allowance. It originally gave employers the opportunity to claim a cut of their National Insurance bill of up to £3,000, and this will now be increased to £4,000.
Last year, Boris Johnson revealed that Corporation Tax would not be lowered to 17%, going against the original intention to cut it by 2%. The Budget confirmed this and revealed the money proposed would go towards spending on public health.
Currently, the National Living Wage sits at £8.21 per hour. From April 2020 this will be increased to £8.72. By 2024, the government is projecting that it will be at least £10.50.
Statutory Sick Pay (SSP) will be available from day 1 to those forced into self-isolation due to the coronavirus outbreak. The Universal Credit minimum income has been temporarily removed, and so mimics SSP.
If you’re a small business, it’s also been confirmed that those with under 250 employees will receive a refund for any sick pay of up to 14 days.
Support from Bright Ideas Accountancy
The announcements in the Spring Budget will impact your tax and accounting affairs. But it’s likely that you’d much rather be focusing on your work – rather than dealing with complicated numbers and legislation. Thankfully, there’s the option to outsource your financial matters to an accountant like Bright Ideas Accountancy.
We’ll help you get ready for the IR35 changes if they’re looking to affect you, and provide support with the likes of accounts and returns.
To take advantage of our services, you can get in touch with our experts. Simply call us on 0161 669 4221, email firstname.lastname@example.org, or fill in our online contact form.
You may also be interested in…
Check your PAYE code is correct for this tax year
May 30, 2023
Make the most of the new tax year by acting now
May 15, 2023
Pension changes make retirement saving more attractive
May 2, 2023