What’s next, now the election’s over?
Jan 09, 2020
Budget & Autumn Statement
Now that Boris Johnson and his Conservative party have won the General Election, will they actually “Get Brexit Done”? More importantly, will the Government now get on with running the country and sorting out urgent issues such as the NHS?
We are waiting to find out the contents of the next Budget, which the Government has recently announced will take place on 11th March. This long expected Budget is likely to include some of the tax measures which were included in the Conservative party election manifesto. The manifesto promised no increases to the rates of income tax, National Insurance (NI) or VAT. Instead, the Tories have pledged to increase the threshold for paying NI from the current £8,632 to £9,500 in 2020/21. This would equate to a tax cut of around £100 a year for more than 30 million workers. Ultimately, the Conservatives’ long term aspiration is to raise the NI threshold to be in line with the income tax personal allowance.
The Tory manifesto also stated that the Corporation Tax rate would remain at 19% instead of reducing to 17% on 1 April 2020, in order to provide an extra £6 billion for the NHS. However businesses would benefit from a planned increase in the structures and buildings allowance, from 2% to 3%. This allowance provides tax relief for the construction or renovation of commercial buildings.
Finance bill should now proceed following election
Now that the General Election is out of the way, the tax changes in the draft Finance Bill which were scheduled to take effect from April 2020 are more likely to go ahead.
The key tax measures “in limbo” until legislated in Finance Act 2020 are:
- Extending the “off-payroll” working rules to the private sector
- Restricting Research & Development (R&D) repayable credit for SMEs
- The appropriate P11D car benefit rates for new cars will generally be reduced by 2%, for each band of CO2 emissions.
- Limiting Capital Gains Tax (CGT) private residence letting relief
If the changes to CGT private residence letting relief do go ahead from 6 April 2020, it may be worth you considering the disposal of property that currently qualifies for this relief before 6 April 2020.
The “off-payroll” working rules will almost certainly proceed, even if a review takes place, and even if they come into effect after 6 April 2020 – so businesses and workers affected should prepare for the planned changes.
Although the Conservatives’ manifesto omitted mention of any cuts to income tax or changes to stamp duty, with such a surprisingly large majority the party could be in a position to drive through policies on these taxes too.
Please do contact us if you need help in assessing the likely impact of any of these upcoming tax changes.