Pensions
- It was thought that there might be a change in the tax relief applied to pensions but for now, this remains unchanged. There may however be a review in the future.
- The pension lifetime allowance has increased with inflation and is now £1,073,100
- The standard lifetime allowance remains at £40,000.
- There has been a change to the way the tapered annual allowance works. The tapered annual allowance reduces your standard annual allowance by £1 for every £2 you earn above the threshold. This threshold was £150,000 but has now been raised to £240,000. This means that for some people they will be able to contribute more into their pension than they might previously have been able to.
- In addition to raising the threshold, the Chancellor also reduced the minimum amount the allowance can be reduced to. Previously, tapering could reduce your allowance to £10,000, but now it can reduce to just £4,000.
Savings
- The adult ISA allowance of £20,000 has been kept the same, however the amount you can contribute into a Junior ISA has increased to £9,000 effective immediately.
- Other savings allowances remain unchanged.
- The government have given clarity on the way gains on bond investments are taxed. Top slicing allows a person to spread the gains over the length of time that the bond was held, but as this is a complicated area, further advice should be sought.
For business owners
- The rate of Corporation Tax was due to be cut but this was delayed and the CT tax rate kept at 19%.
- Entrepreneurs relief, which allows those selling businesses to pay a lower amount of capital gains tax is subject to a lifetime allowance. This allowance was reduced from £10,000,000 to £1,000,000. The Government do not expect this to affect 80% of business owner.
Personal Tax
- The 0% rate for National Insurance payment is being increased to £9,500.
- Inheritance tax allowance remains unchanged.
Coronavirus
The spread of the Coronavirus has reached pandemic levels and is affecting peoples’ lives and global stock markets. The Government have announced their current plans to try and delay the spread of the virus within the UK and the budget announced the following measures.
- Statutory sick pay to start from day 1 for those sick with Covid-19.
- £25bn allocated to help small firms who have staff off sick as a result of Covid-19.
- The Government has pledged to give the NHS all the support it needs at this time.
On a lighter note, for cyclists like myself, there was £500m allocated to fill in potholes. The estimate is that this could fill in 50 million potholes and I could point out a few on my daily commute!
