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2020 sPRING BUDGeT Chartered Accountants
& Registered Auditors +44 (0) 28 90325050 |
www.muldoon-accountants.co.uk
The first Budget statement since 29 October 2018 will take place on Wednesday 11 March 2020.
It is remarkable, indeed unprecedented, in modern times, for a whole calendar year to have passed without a Budget.
The following is a very brief overview of what we know about some of the measures that are likely to be enacted, based on the pledges made in the Conservative Party election manifesto.
Tax commitments in the manifesto Many people have expressed surprise about the lack of major tax policy announcements in the manifesto. For business owners trading through limited companies, the key points to note are summarised below:
• A promise not to increase the rates of Income Tax, National Insurance or VAT for the lifetime of this Parliament - the so-called ‘Triple Tax Lock’. • entrepreneurs’ Relief (eR) is to be reviewed and reformed. • A ‘fundamental review’ of the business rates system.
The implications of the Triple Tax Lock (TTL) On the face of it, the Government’s commitment to the TTL will severely limit its tax-raising options, but important questions remain unanswered.
For starters, does the TTL mean that there will be no changes to the taxation of dividends, either by increasing the specified rates of tax charged on them or reducing (even abolishing) the current Dividend Allowance of £2,000?
Whilst such changes would be hugely controversial, the Government has a free hand to raise other taxes, the prime candidates being IHT, CGT, stamp Taxes and Corporation Tax.
The future of Entrepreneurs’ Relief (ER) eR is a 10% rate of Capital Gains Tax and can be claimed, for example, on the sale of shares in trading companies (subject to meeting all the detailed conditions). The use of the word ‘reform’ suggests that eR won’t be abolished but it seems that further tightening of the rules is likely.
Corporation Tax rates – what is the direction of travel? Prior to his election, the Prime Minister confirmed that the planned reduction in the UK’s Corporation Tax rate from the current 19% to 17%
(with effect from 1 April 2020) would not go ahead. It remains unclear whether Corporation Tax will be increased by this Government and we can only hope that the Chancellor’s speech will shed more light on its thinking, given the perceived importance of the headline rate to business investment decisions.
If there is anything in this article that affects you or somebody you know, please speak to Steven McVitty for independent professional advice.
60 - PHARMACY IN FOCUs
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