National Insurance thresholds at which employees and the self-employed start paying National Insurance contributions have increased from £8,632 to £9,500 from April 2020. This will represent a saving of around £100 per year.
To help support the employment of veterans, there will be a new National Insurance holiday for employers of veterans in first year of civilian employment. Employers will be able to claim this holiday from April 2021 and it will exempt employers from any NICs liability on the veteran’s salary up to the Upper Earnings Limit.
With effect from April 2020, there will be an increase in the scope of non-taxable counselling services to include medical treatment such as cognitive therapy when provided to an employee as part of employer’s welfare counselling services.
There will be an increase of the flat rate deduction for homeworking available to employees to cover additional household expenses from £4 per week to £6 per week. This is for employees who work at home under homeworking arrangements and will take effect from April 2020
All businesses, charities and community amateur sports clubs who are eligible for the Employment Allowance will see the allowance increase from £3,000 to £4,000 in April 2020. The allowance represents a reduction in Secondary Class 1 National Insurance Contributions payable and is expected to benefit around 510,000 businesses with an average gain of around £810 per year.
Neonatal leave and pay
There will be a new entitlement to neonatal leave and care for employees whose babies spend an extended period of time in neonatal care.
Company vans and fuel
From 6 April 2020, fuel benefits charges and the van benefit will increase in line with CPI. We have already seen a reduction in tax on electric cars but from April 2021, this will be extended and there will be a nil rate of tax for zero emission vans within the van benefit charge
First year allowances for business cars
From April 2021 first year allowances will be extended to ZEVs only and the main rate of writing down allowance of 18% will apply to cars with emissions up to 50g/km. The special rate WDA of 6% will then apply to higher polluting cars with emissions above 50g/km. First year allowances for zero emission goods vehicles and natural gas and hydrogen refuelling equipment will also be extended.
Personal income tax rates and thresholds will remain at 2019-20 rates
There has been an increase to the income limits used in calculating a tapered annual allowance. The threshold income, which is broadly income before tax and excluding pension contributions, is increased from £110,000 to £200,000 so individuals with income below this level will not be affected by the tapered annual allowance and the annual allowance will only begin to taper down for induvial who also have an “adjusted income” above £240,000.
The bad news is that there is also a decrease to the minimum tapered annual allowance from £10,000 to £4,000 for those who breach the new income limits. The new limits will have effect for the tax year 2020 to 2021 and will be effective for benefits accrued on or after 6 April 2020.
The lifetime allowance for pensions will increase in line with CPI for 2020-21 to £1,073,100.
The starting rate for savings tax band for savings income that is subject to the 0% starting tax rate will remain at its current level of £5,000 for 2020-21.
The adult ISA annual subscription limit for 2020-21 will remain unchanged at £20,000 however the Junior ISA and Child Trust Fund annual subscription limit will be increased from £4,368 to £9,000.