Budget 2020: What’s in it for TechCo’s?

11th March 2020

As Chancellor Rishi Sunak sits down after presenting his first Budget to the Commons, the headlines will all relate to tackling Coronavirus and increased spending on our public services. Reading the small print, however, which is released by HMRC straight after the Budget, announcements that will be of interest to clients running technology companies include:

 

  • Increasing R&D Expenditure Credits (RDEC) from 12% to 13%.
  • With effect from Budget Day, reducing the Entrepreneurs Relief ER lifetime limit from £10m to £1m.
  • Reviewing the EMI option tax scheme, to increase eligibility.
  • More public investment in digital networks.
  • Further support for the UK net zero carbon emissions target of 2050.
  • Extending funding of the British Business Bank’s start-up loan programme to 2021-22.
  • To consult on whether eligible R&D costs should be expanded to include investments in data and cloud computer.
  • Increasing the annual allowance threshold for pension contributions to earnings over £200k.
  • Introduction of annual PAYE cap on RDEC refund claims wef 1-Apr-21.
  • Introduction of 2% digital services tax wef 1-Apr-20.
  • The government will publish an evaluation of the introduction of Making Tax Digital for VAT.

 

So the change to ER, that has been debated endlessly in the Press for the last few weeks, turned out to be a leak rather than unfounded speculation, and probably takes the gloss off the rest of the (generally positive) changes.

Disclaimer - All information in this post was correct at time of writing.
Other Blogs
Paul Jefferson
18th April 2024 Beware of VAT refund fraud

Beware of VAT refund fraud!   We have become aware of several recent cases where taxpayers’ bank account details have been amended on the HMRC portal, without their knowledge, so that VAT repayments have been fraudulently diverted to a third party.   It seems that HMRC have been acting on the basis of a fraudulent…

Andrew Band
17th April 2024 Whitings 2024 Annual Farming Seminar

Our Whitings 2024 Annual Farming Seminar is just around the corner.   Farming always has to cope with changing environment, weather, commodity prices, political changes, etc. This year these challenges feel heightened and this is why we are pleased to welcome back speakers from the Andersons Centre to inform us of these changes and what…

Amanda Newman
17th April 2024 Buy To Let through a Limited Company

There continues to be an ongoing debate when buying a residential property to let out about whether to buy this personally or set up a limited company to own it. Unlike our sole trader v limited company comparisons for a trading business there is not a clear division based on profits. There are a lot…

Nick Edgley
11th April 2024 Do you need to re-register for Child Benefits?

If you’ve heard about the changes post 5 April 2024 and are wondering whether you need to re-register for Child Benefits, this is the blog post for you.   If you have been affected by the increase in the High Income Child Benefit Charge cap to £60,000, then you may need to restart your Child…

Peter Brown
10th April 2024 Pension Contributions for directors

Are you thinking about planning ahead for retirement and want to find out more about Pension Contributions for directors?   When it comes to planning for your retirement, Company pension contributions can offer significant benefits in terms of reducing your company’s Corporation Tax bill. Here’s how you can use both personal and company contributions to…

Angelica Ferentinos
9th April 2024 Child Benefit changes – What you need to know

The new Child Benefit changes came into effect on 6 April 2024, with families receiving up to £1,331 per year (for the first or only child), and up to £881 per additional child, increasing by £83.20 and £54.60 respectively on the year before. This is paid directly into your bank account every 4 weeks. There…