Clearly a Budget for businesses it seems the individuals tax regime is largely unaffected. The Capital Gains Tax rates remain at the relatively low position of 20% generally, and 28% on residential property. Entrepreneurs' Relief rate at 10% on first £1 million of business gains has also surprisingly survived, under the new name of BAD relief (Business Assets Disposals Relief).
Inheritance Tax legislation is untouched, so planning opportunities are still available to gradually move valuable assets down the generations without IHT charge. The continuation of freezing Stamp Duty nil rate band on residential property is welcome with transactions up to £500,000 still not paying Stamp Duty if it is on the only property in your ownership. For second homes and property investment portfolios the additional 3% rate will still apply but that is fairly modest and will encourage the movement of properties as the Spring market gets under way. For overseas investors the new 2% additional Stamp Duty applies from 1st April so there is still time to make an investment in UK property before that charge starts to bite.
Rishi mentioned new rules to unlock pension funds for business investments but there are no details available on this yet. This may be helpful to entrepreneurs seeking to borrow from their own pension funds to invest further in their business.
Reminder the 'off payroll' rules apply from April 2021 making workers into 'deemed employees' so income tax and NIC are deducted up front. This includes those individuals supplying their services through their own personal services company, where the ultimate contractor is a large company.
Interesting to note the Diverted Profits Tax to increase from 25% to 31% from April 2023. Aimed at global conglomerates extracting profits from the UK tax net.
If you have any questions about how you are affected by the changes announced in todays budget please contact us.