The government has confirmed that it will implement all but one of the recommendations made by Sir Amyas Morse in his review of the loan charge rules. The legislation will have effect retrospectively to 5 April 2019, which is the relevant date for the purposes of applying the loan charge. However, clauses related to repayments of voluntary payments will have effect on and after the date of Royal Assent to Finance Bill 2020.
The maximum Employment Allowance (EA) is increased by £1,000 to £4,000 from April 2020.
Top Slicing Relief on Insurance Policy gains
An amendment to the legislation will allow the personal allowance to be reinstated within the calculation for top slicing relief (TSR). This will provide additional relief for taxpayers whose entitlement to the personal allowance has been reduced because a gain is included as part of their income.
Pension Tax Changes
The income limits used in calculating a tapered annual allowance is increased and the minimum tapered annual allowance reduced.
Income Tax Automation
A technical change is being made to confirm that processes used by HMRC to carry out certain functions, including the issue of notices to file self-assessment tax returns and notices imposing a penalty for late filing of those returns, may be carried out using a computer or other means, rather than an individual officer.
The 100% first year capital allowance will remain available for expenditure incurred in relation to all areas, whenever designated, until at least 31 March 2021.
The corporation tax (CT) main rate is set at 19% for the financial year beginning 1 April 2020. This maintains the rate at 19% rather than reducing it to 17% from 1 April 2020.
R & D Expenditure
The research and development expenditure credit rate for corporation tax purposes is increased from 12% to 13% in relation to expenditure incurred on or after 1 April 2020.
Digital Services Tax
From 1 April 2020, the government will introduce a new 2% tax on the revenues of search engines, social media services and online marketplaces which derive value from UK users
The capital gains tax (CGT) Entrepreneurs’ Relief lifetime limit is reduced from £10m to £1m for qualifying disposals made on or after 11 March 2020.
CGT exemption 2020 -2021
The capital gains tax (CGT) annual exempt amount for 2020–21 will rise from £12,000 to £12,300 for individuals and personal representatives, and from £6,000 to £6,150 for trustees of settlements.