Budget Update – Year to 5 April 2020

From 6 April 2019, the thresholds will change to the amounts set out below (this does not include rates in Scotland).

                                                         2020              2019

Personal allowance                             £12,500           £11,850

National Insurance (PT)                     £8,632              £8,424

Higher rate threshold 40% tax         £50,000           £46,350

Marriage allowance                             £1,250              £1,185

 

Limited company shareholders:

Dividend allowance                              £2,000               £2,000

The dividend allowance is particularly important to owner managed businesses. The allowance of £2,000 for the year to 5 April 2020 is set at a rate of 0%, meaning any dividend income in the year up to £2,000, will be taxed at 0%.

Corporation tax is set to remain at 19% (the same as for the year to 31 March 2019).

 

Self-employed:

There were discussions around raising the rate of National Insurance on Self-employed profits. Class 4 National Insurance is set to remain the same for the year to 5 April 2020.

Class 4 National Insurance                        9%                   9%

Rates for taxable profits

over £8,632 up to                                         £50,000          £46,350

Class 2 National Insurance                      £156.00         £153.40

 

Capital Gains Tax (for individuals):

Annual exemption                                     £12,000       £11,700

 

VAT Threshold

The taxable turnover threshold which determines whether a business or person must be registered for VAT, will remain at £85,000.

The taxable turnover threshold which determines whether a business or person may apply for deregistration will remain at £83,000.