Accountancy Blog

Year-end Tax Guide 2019/20

Year-End Tax Guide 2019/20

How to use this tax guide

The last few months of the tax year are the ideal time to pause and reflect, and to make sure you’ve organised your finances as efficiently as possible before the new tax year begins on 6 April 2020.

It’s important to consider this from every angle: have you maximised all of your tax-free allowances? Have you claimed any reliefs available? And have you made plans for future changes?

This guide will help you to answer those questions and more, with detailed summaries of the tax rates, allowances and reliefs that apply to businesses and individuals for the remainder of 2019/20.

Each section comes with a set of planning points, too, which you can use as a checklist to ensure you’ve covered all the key areas to consider.

And, of course, you can contact us if you have any questions or want to discuss your tax planning further. More…

Budget set to take place in February once Brexit is resolved

The new government intends to announce the 2020/21 tax rates, bands and allowances in a full Budget next month.

Prime Minister Boris Johnson secured a handsome majority on 12 December 2019, and swiftly returned Sajid Javid to the position of Chancellor.

Javid was poised to deliver his first Budget speech in November 2019, only for it to be cancelled following the decision to call the first December general election since 1923.

While resolving Brexit remains the biggest priority for the new government, time is running out to legislate for any tax changes before the start of 2020/21.

Johnson aims to finalise the UK’s departure from the EU before the end of this month, before holding an early Budget. More…

Complex taper rules could lead to ‘huge’ tax bills for high earners

High earners could face large tax bills if they fail to declare pension contributions on their 2018/19 tax returns, according to a report.

When completing self-assessment, taxpayers are asked if they have put any money into a pension scheme above the annual pensions allowance.

For most people, this allowance is £40,000 – but for every £2 of income above £150,000, a high earner’s allowance is reduced by £1 to give an alternative figure known as the tapered allowance.

The maximum reduction is £30,000, so additional-rate taxpayers who earned more than £210,000 in 2018/19 will see their tapered annual allowance reduced to £10,000.

Pension contributions that exceed an individual’s tapered annual allowance will be charged at the taxpayer’s marginal rate, usually 40% or 45%. More…

Extension of off-payroll rules into the private sector could face delay

The planned extension of the new off-payroll rules to the private sector will be included in a review into how the new government can provide better support to the self-employed.

The pre-election admission by Chancellor Sajid Javid increases the prospect of the controversial tax measure, which was contained in Finance Bill 2019, being delayed.

“In our manifesto, we promise a review of how we can further help the self-employed,” Javid told Money Box on BBC Radio 4 in the run-up to last month’s general election.

“But one thing in particular I want to look at again are the proposed changes to IR35.”

When pressed by host Paul Lewis as to whether the extension of the rules to the private sector may be put off, Javid stopped short of committing to a delay.

“I don’t want to pre-empt the review,” added Javid. “But it makes sense to include the IR35 changes in that review.” More…

Quarter of small businesses in the UK expect to go bust by 2024

A quarter of small business owners in the UK believe their company will fold in the next four years, research has claimed.

Late payments (54%), tax rates (44%) and cyber-attacks (27%) were the biggest concerns among the 500 owner-managers polled by cloud accounting software provider Xero.

Other challenges included Brexit (44%), maintaining or boosting levels of productivity (31%) and recruitment costs (19%).

Around a third (37%) of small business owners said they are experiencing their most turbulent period.

The pressures of running a small business in the current climate also affected more than a third of respondents’ mental health. More…