The newly appointed Chancellor, Rishi Sunak, announced a spirited Budget with a repeated emphasis on ‘getting things done’, echoing the recent election campaign.
His initial focus was on the short-term measures needed to deal with the challenges the UK faces as a result of the coronavirus pandemic. These amounted to a £12bn fiscal stimulus, with more available if required. There was help for both businesses and individuals.
The announcement included:
- An increase of £90,000 to the tapered annual allowance thresholds for pensions tax relief, removing the taper as an issue for most people with incomes below £200,000. As this is being introduced with effect from 6 April 2020 it doesn’t help those who face a tax charge in respect of this tax year.
- An immediate change to top-slicing relief in light of the Silver case which was heard by the First Tier Tribunal last year and due to be heard by the Court of Appeal at the end of March. This affects the tapering of the personal allowance when calculating the relief available.
- An upcoming review of VAT charged on fund management fees, although this hasn’t gone as far as consultation.
The Chancellor is due to announce another Budget in the Autumn and so there are several consultations about possible future tax changes, including new proposals on the treatment of fund management companies, pension tax administration, and aspects of research and development tax credits.
We've prepared a handy summary of the key changes for the forthcoming 2020/21 tax year that have already been announced. Read the summary here.
We also have a tax tables 2020/21 booklet available to download here.
If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the Budget, please contact the ican Technical Services team at ican@canadalife.co.uk.