Well, after a false start, we now know that Sajid Javid is going to deliver his first Budget on 11 March 2020. It will be the first, in more than four decades, as a country outside the EU.
Based on the Conservative manifesto, there are key areas that the Chancellor is expected to target:
The manifesto included plans to spend £20 billion above current levels. Much of this could be aimed particularly at the North of England and it may also include an announcement on the future of the HS2 rail link between London and Birmingham.
Currently, treasury rules are based on gross added value, a system which some say benefits London and the South East. Javid is expected to revise these rules to improve wellbeing and reduce regional gaps.
During the election campaign, Boris Johnson promised an increase in spending on public services with the aim of ending a decade of austerity initiated by his predecessors.
The Chancellor is expected to deliver on the PM’s priorities, namely funding for schools and vocational training, new hospitals, and training additional police officers. Social care will also be a key issue, with no specifics in the manifesto, but with a promise to raise funding by £1 billion.
Whilst committing to net zero carbon emissions by 2050, few spending related measures have so far been announced.
Boris Johnson promised to cut taxes before the election. Changes could include a raising of the threshold for National Insurance contributions.
A freeze in the predicted cut of corporation tax would provide approximately £6 billion for other priorities. There are also likely to be measures allowing an increase in public borrowing to take advantage of low interest rates.
Hidden in the pre-Budget small print was a potential review of Entrepreneurs’ Relief, which may be reformed, or even abolished. Rules covering Capital Gains Tax may also be changed, widening the scope and potentially increasing rates of tax. It’s also expected that with effect from April 2020 the deadline for reporting gains on property sales will be shortened to 30 days post sale.
A review of off-payroll workers, i.e. freelancers, who operate via companies, has been undertaken, and it’s possible that rules previously affecting the public sector could be targeted at the private sector.
In the next couple of months, it’ll be important to start talking to your professional advisors about tax planning before the end of the tax year on 5 April 2020. Although, I hope you do this anyway, at the start of each year! Once the Budget details are known, there’ll be a short window of opportunity to put in place any additional measures for tax planning.
If you have any queries or would like more information, you can contact me on 01473 833411 or [email protected]
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