Home / Blog / Budget 2020 summary: Key Points, Entrepreneur’s Relief to Stay

Budget 2020 summary: Key Points, Entrepreneur’s Relief to Stay

The Corona Virus resulted in an emergency rate reduction from 0.75% to 0.25% making it one of the first such reductions on budget day. This Budget has been taken over by the Corona Virus Covid-19 and reflected in the commitment of the Chancellor.

The Government announced £12 billion spending for Covid-19, which includes dedicated HMRC helpline to defer tax payments for affected businesses or self-employed individuals, statutory sick pay (SSP) for individuals and support welfare system for individuals who cannot claim SSP.

Here are the key points of the budget:

Tax and Pensions

  • NIC Threshold: As confirmed in February, the tax threshold for National Insurance Contributions will rise from £8,632 to £9,500 from 6th April 2020. This will result in net savings of £104 for employees and £78 for self-employed people.
  • Use of Home as Office: The flat rate income tax deduction available to employees to cover additional household expenses will increase from £4 per week to £6 per week from 6th April 2020.
  • Entrepreneur’s Relief: Against all odds, the relief is here to stay, but the threshold for lifetime limit has been reduced from £10 million to £1 million. This means 90% of small business owners have nothing to lose.
  • Off-payroll in Private Sector: Government has already promised soft-landing and no penalties for 1 year. The reforms will now be legislated in the Finance Bill 2020 and implemented from 6th April 2020.
  • Pensions: Pension lifetime allowance to rise with inflation to £1,073,100. The taper allowance threshold for high earners has been increased by £90,000 to £200,000. The taper allowance reduced from £10,000 to £4,000.
  • Junior ISA: The threshold has been increased to £9,000 for children’s Junior ISA.
  • No other new announcements on income tax as personal allowance threshold to remain £12,500.
Budget 2020 summary: Key Points, Entrepreneur’s Relief to Stay


  • Employment Allowance: The allowance will rise from £3,000 to £4,000 from 6 April-2020. Only businesses with Class 1 NIC bill of below £100,000 in the previous year will be eligible.
  • New Business interruption loan of £1.2m available via banks/lenders. Details to follow.
  • Business rates: To support businesses, the rates for properties with a rateable value of below £51,000 will be NIL for at least one year. £3,000 grant to small businesses to meet ongoing business costs. Pubs with rateable value of £100,000 or below will receive a £5,000 discount.
  • Structure Building Allowance (SBA): Businesses making qualifying investments in construction of new buildings or renovating will receive capital allowance of 3% (2% previously) from April 2020.
  • Research and Development (R&D) Relief: The PAYE cap limit that was being introduced to prevent abuse on the payable tax credit has been delayed until 1 April 2021.
  • Digital Service Tax (DST): 2% tax announced in 2018 on revenue of some digital businesses, will be implemented from 1st April 2020.
  • SDLT: 2% SDLT surcharge on non-UK residents purchasing residential properties in the UK to be introduced from April 2021.
  • VAT: No changes in rates, but VAT scrapped on tampons from Jan 2021, and on e-books and digital newspapers from December 2020.
  • Cars: First Year Allowance of 100% to continue for zero emission cars from April-2021.

Government plans to spend £600bn on roads, rail, broadband and housing which means significant job creation. The budget also catered to green issues with measures like introduction of plastic packaging tax from April 2022, £500m for rapid car charging hubs and £640m climate fund for preserving natural habitats.

Overall this budget is bold budget in terms of having the greatest infrastructure program since 1955 and Corona Virus + Brexit Cocktail makes it even more challenging for the Government to deliver.

To read the full budget, click here.

Also Read :-

Share this post

Loading Comments

Contact us now! Reach our expert accountants for any of your accounting related queries

Complete the form below and we will get in contact as soon as possible
0333 060 3321
We're Multi-Award Winning...
...But We'd Rather have your Vote.
Accredited by...
  • Professional Passport Umbrella
  • Professional Passport Accountancy
  • Chartered Institute of Management Accountants
  • Freelancer & Contractor Services Association
  • IPSE