Budget 2020

Budget 2020

19/03/2020

 

The 2020 Spring Budget was heavily dominated by the issue of Coronavirus and of how to protect the economy against its effects. The government has outlaid many proposals for the employed and small to medium size businesses to overcome any interruption to trade.

COVID-19 BUDGET

Business Rates Relief

  • The Government has announced a freeze for 12 months for all businesses operating in the leisure, hospitality and retail sectors
  • If you are a business who falls in the above category, then you will automatically receive amended rates bills from your local authority

Small Business Grant Funding

  • If you qualify for the small business rates relief or rural rate relief then you may be applicable to apply for a one-off £10,000 grant. This is to aid your business potential downturn as a result of Coronavirus
  • Businesses that operate in the leisure, hospitality and retail sectors and have a rateable value between £15,000 and £51,000 are eligible to apply for a grant of up to £25,000
  • Contact your accountant and local authority to apply for this grant

Business Interruption Loan Scheme

  • The Government has announced Government backed loans to a value of £330bn
  • These loans will be on favourable terms, with no interest payable in the first 6 months

Payroll

For Resident Optoms

  • Statutory Sick Pay (SSP) will be paid from the first day of sickness, rather than the fourth day for affected individuals and will include those infected and those self-isolating (even if they do not have the symptoms of the disease)

For Employers

  • If you are a small to medium size business (less than 250 staff as of Feb 2020), you can claim refunds for sick pay payments made to staff for two weeks, if approved SSP payments. A GP note is not required but all record of staff absences are to be kept
  • The actual method for making a claim is yet to be agreed as current payroll processes cannot accommodate this type of refund

For Locums

  • As Locums, we are not eligible to SSP – For those who do not have income protection, the Government has provided easier access to Universal Credits and the Contributory Employment and Support Allowance

For all

  • He Chancellor has confirmed that mortgage lenders have agreed to allow a period of months grace on any mortgage repayments. This will be reviewed again in due course.
  • If you pay rent, then at the moment there is no real announcement other than if you are struggling, to contact your local authority
  • Some banks have also increased credit card and cash withdrawal limits

HMRC’s Time to Pay

  • HMRC have expanded their existing Time to Pay arrangements in order to assist businesses that have been affected by COVID-19. You can now defer your tax payments (including PAYE and VAT) and agree to pay by instalments
  • HMRC have set up a helpline to specifically to deal with this: 0800 0159 559

Insurance

  • The Government has announced that if leisure/hospitality/retail businesses have insurance which covers pandemics then they will be able to claim due to the measures recently introduced by the Government

Companies House

  • Companies can apply for an extension if they are unable to file their accounts on time due to coronavirus
  • Extensions are generally given for up to 30 days. Guidance on how to apply for this extension is included below:

https://www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts

IR35 reform delayed

  • Controversial IR35 tax reforms in UK delayed up to April 2021

 

BUDGET 2020

National Insurance (NI) Relief

  • The Government has decided to increase the NI relief by 33% from £3,000 to £4,000. That is an additional £1k of relief to your Employer’s NIC contributions
  • Ensure you claim this relief through your payroll

Entrepreneurs relief

  • Is not abolished but the lifetime allowance is reduced from £10m to £1m, so will preserve the 10% rate on the first £1 million of qualifying gains
  • Business owners and their advisors will need to consider other options to reduce CGT on business sales in excess of this £1m limit

National Insurance Contributions (NICs)

  • National Insurance Threshold will rise to £9,500 from April 2020 (was £8,632). This will save on average c£100 a year in for all employees and locums.
  • As a resident you don’t have to do anything and just enjoy the additional c£100
  • As a locum trading under a limited company, re-visit your salary drawdown to ensure maximum tax efficiency

Tampon tax

  • From 1st January 2021, the 5% 'tampon tax' on women’s sanitary products will be scrapped (zero-rated)

VAT

  • VAT registration limit (£85,000) and deregistration limit (£83,000) remains unchanged

Fuel duty

  • Fuel duty froze for the 10th year in a row

Digital publications

  • No VAT to be charged on digital publications (e-books, e-newspapers, e-magazines and academic e-journals, etc.) from 1 December 2020

Income rate thresholds

  • The Income Tax thresholds for 2020-21 have remained unchanged at:
    • Basic rate band £37,500 (2019-20 £37,500)
    • Higher rate band £37,501 to £150,000 (2019-20 £37,501 to £150,000)
    • Additional rate, no change, applies to income of more than £150,000
  • There is no change in Income Tax rates, and the tax rates applied to dividend income
  • Changes to these Income Tax bands apply to England, Wales and Northern Ireland. The Scottish parliament now set their own Income Tax bandings 

Personal allowance

  • The personal Income Tax allowance for 2020-21 is maintained at £12,500 (2019-20 £12,500)

Corporation tax

  • The expected reduction of Corporation Tax to 17% has been cancelled
  • Corporation Tax is to remain at 19%

ISA’s

  • Adult savings limits remain unchanged at £20,000
  • Junior ISA limits are increased to £9,000

 

We at Locumkit will continue to keep you up to date with developments and how these can impact the people in the Optics industry. If you need any business advice or have a general question, please do not hesistate to contact us.