The Spring Budget was unsurprisingly overshadowed by the recent Coronavirus outbreak, with the Government providing an emergency response fund with additional support to the NHS and businesses to overcome this challenge. From a tax perspective, there were minimal changes announced, but of course, there are a still a number of points to be considered. We have highlighted below those that we believe will have the greatest impact on you.

Coronavirus support
The changes, in respect of Coronavirus, included Statutory Sick Pay (SSP) for up to two weeks for those who have been advised to self-isolate. This starts from the first day of absence, even where the individual has not displayed symptoms.  If you are running a company with fewer than 250 employees, the government has provided grants to meet the costs of providing SSP to your employees, due to Coronavirus.  In addition, business rates have been suspended for a year for shops, cinemas, restaurants and music venues with a rateable value below £51,000.  HMRC are relaxing their time to pay arrangements for those affected by the virus to give businesses and self-employed individuals the additional time needed to meet their tax liabilities. This includes, in certain cases, cancelling penalties and interest.   

Entrepreneurs relief changes
We were expecting changes to Entrepreneurs Relief in some form or other. This was delivered by reducing the lifetime limit from £10m to £1m with effect from 11th March 2020.  It is worth mentioning that the lifetime limit for investors relief has been unaffected by these changes and remains at £10m, with the aim of continuing to incentivise external investors to invest in unlisted trading companies.

Pension tapering thresholds increased
Over the last few years we have noticed particularly the healthcare industry being affected by the pension tapering rules, meaning doctors were less willing to pick up more shifts at the risk of their pension annual allowance of £40k being restricted.  In a positive step, the Chancellor announced that the thresholds for pension tapering will increase from 6 April 2020. This means that anyone with income of less than £200,000 will not be affected by the tapered annual allowance. However, for those with earnings over £300k, their pension annual allowance will be tapered even further to £4k.    

Increase in National Insurance threshold
There were no changes made to the personal allowance or the income tax brackets but there was an increase of the primary national insurance threshold to £9,500.  This is expected to come in line with the personal allowance of £12,500 over the next few years.  This provides a small saving for employees and employers.  

Previously announced changes coming into force April 2020
Although not highlighted in yesterday's Budget, there are several changes which come into force in April 2020 which will affect many. The first is the change to Capital Gains Tax for residential property.  If you sell a property after 6 April 2020, you will be required to file a return and pay over the tax due within 30 days of completion, with any adjustments completed via your annual tax return.  The amount of tax due may increase due to the new restrictions on deemed occupation for the final period of ownership from 18 months to 9 months for Principal Private Residence Relief in addition to the abolition of lettings relief, unless you have lived in the property with the tenant. 

Also, the changes to IR35 will be implemented next month, shifting the responsibility from the contractor to the fee payer, meaning a lot of contractors will be facing higher tax liabilities without the benefits received as an employee such as pension and sick pay entitlement. 

If you would like to discuss any of the above points or others that were announced in the Budget to see how they may affect you, please contact a member of our tax team who will be happy to help.