- Financial planning
- 12 minute read
Unusually for the first budget after an election, the Chancellor has announced significant extra spending, but relatively little in the way of tax increases.
What is the money going to be spent on and where is it coming from? Here’s our take on the new Chancellor’s first Budget.
Budget highlights:
- The Chancellor announced a £12 billion “temporary, timely and targeted” coronavirus stimulus on top of an £18 billion increase in general public spending, but tax measures were relatively few.
- The pension annual allowance thresholds will each be increased by £90,000 from 2020/21, removing taper as an issue for most people with incomes under £200,000.
- The capital gains tax entrepreneurs’ relief lifetime limit has been cut from £10 million to £1 million with immediate effect.
- The annual investment limit for junior ISAs and child trust funds will be increased to £9,000 from 2020/21.
- The national insurance contributions employment allowance will increase from £3,000 to £4,000 from April 2020.
- There will be a review of the taxation of funds to make the UK more attractive for fund management. It will also consider the VAT treatment of fund management fees.
- From April 2021, only zero emission vehicles will get 100% first year allowances. Cars with emissions up to 50g/km will have an 18% a year writing down allowance; for higher emitters the allowance will be 6% a year.
- E-publications (e-books, e-newspapers, e-magazines and academic e-journals) will be VAT zero-rated from 1 December 2020.