As the 2020 Budget unfolds, Chancellor, Rishi Sunak, has announced:
- The Income Tax personal allowance has already been frozen at £12,500.
- The higher rate threshold of Income Tax has also been frozen for the rest of the UK at £50,000, income between £50,000 and £150,000 will be assessable to income tax at 40%. This does not affect Scottish taxpayers.
- The National Insurance threshold is to rise from £8,632 per year to £9,500 per year. This means payment of National Insurance if earning £182.70 per week or £9,500 a year.
- Changes to the minimum wage have already been agreed and will come into effect in April. Over 25s will be entitled to the National Living Wage of £8.72 an hour while younger workers will also earn more. By 2024, the National Living Wage will reach two thirds of median earnings, making it £10.50 per hour. The National Living Wage is going up 6.5% to £8.20 for 21 to 24 year-olds and for 18 to 20-year-olds, it’s a 4.9% increase to £6.45. Under 18s will earn £4.55 (up 4.6%) and apprentices £4.15, an increase of 6.4%.
- Corporation Tax will not be cut and will remain at 19%.
- Entrepreneurs Relief – this lifetime limit has been reduced from £10 million to £1 million despite calls to scrap the relief altogether.
- Fuel, beer, wine and spirit duties have been frozen.
- The “tapered allowance threshold” for pension tax relief will increase to £200,000.
- 5% VAT on female sanitary products will be abolished with a zero rate of VAT applying from the start of next year.
- There will be an introduction of 2% Stamp Duty surcharge for non-UK residents from April 2021.
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