CORONAVIRUS JOB RETENTION SCHEME
We have received an email from HMRC as follows:
On 27 March I emailed you to advise that the latest guidance on the Coronavirus Job Retention Scheme had been published at the links below, and we committed to keep you regularly updated.
I can now confirm that the employer guidance and guidance for employees have been further updated in line with some of the main queries we have received from stakeholders. Whilst all the guidance has been refreshed, the main areas I would draw your attention to are:
- the more detailed information on scheme eligibility
- further information on how to calculate a claim
- clarification of what constitutes wages.
I would encourage you to please review the links above if you would like more information about the scheme.
We will continue to keep you informed to ensure that you have access to the assistance you need.
BUDGET CHANGES
And now for something a bit more normal …………….. Tax changes for 2020-21.
Personal Tax and NIC Rates and Allowances
For the 2020/21 tax year, the personal allowance remains at £12,500 but the threshold for NICs has increased above inflation as part of the government’s pledge to bring the two regimes into line.
The NICs threshold is now £9,500, up from £8,632. As a result, the average full-time worker will see their tax bill cut by £104 a year, and the typical self-employed worker by £78.
There are no changes to the rates of tax.
National Living Wage
The national living wage (NLW) for workers aged 25 and over increased by 6.2% to £8.72 an hour from 1 April. Workers aged 21 to 24 saw their hourly rate increase from £7.70 to £8.20, while those aged 18 to 20 saw a rise of 30p to £6.45 an hour.
For people aged 18 and under, their hourly rate went up by 20p to £4.55. The minimum wage for apprentices also increased, from £3.90 to £4.15.
Pensions
From 6 April, the pensions lifetime allowance will rise, up from £1,055,000 to £1,073,000. The Treasury will raise the threshold at which the tapered annual allowance kicks in by £90,000 from £150,000 to £240,000 for the tax year 2020-21, to address concerns that senior doctors were retiring or cutting hours to avoid pension penalties.
The state pension will go up by 3.9% in April, the biggest rise since 2012. This means those receiving the new state pension (who reached pension age after 6 April 2016) will see an increase of £6.60 a week to £175.20. Those claiming the old state pension will see their basic payment increase by £5.05 a week to £134.25
Student Loan Repayments
The amount that graduates can earn before starting to repay their student loan will increase from £25,725 to £26,575.
Inheritance Tax
The inheritance tax (IHT) nil rate band of £325,000 remains unchanged, but residence nil rate band, which is a relief for those passing on their main home to direct descendants will be increased to £175,000.
Property Income – Mortgage Tax Relief
Landlords can no longer deduct mortgage expenses from their rental income to reduce the tax they pay. Instead, they will receive a tax-credit, based on 20% of their mortgage interest payments.
IR35 Contractors
There is a significant change to the government’s original plans, in that the coronavirus crisis has seen a deferral of changes to the IR35 regime, which would have seen private sector employers assume responsibility for determining the tax status of off payroll workers. These new regulations will now take effect from April 2021.
Capital Gains Tax on Rented Properties
There are significant changes to Capital Gains Tax when you sell a rented property. We will deal with these separately at a later date.