February 3 2020

Reductions for individuals for 2020/21 announced

Source: IBFD Tax Research Platform News

HM Treasury announced on 30 January 2020 that individuals will enjoy an overall reduction to their tax burden effective April 2020 (2020/21). The changes will be implemented by way of the following statutory instruments laid on 30 January 2020:

The Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2020

These Regulations increase the following thresholds:

  • Class 2: self-employed persons pay a flat rate of GBP 3.05 per week. Individuals whose earnings do not exceed the Small Profits Threshold of GBP 6,475 are exempt from charge;
  • Class 3: individuals with earnings lower than GBP 15.30 per week may make a voluntary contribution to preserve their entitlement to the social security pension; and
  • Class 4: the lower limit is GBP 9,500.

The Social Security Benefits Up-rating Order 2020

This Order increases the rates or amounts of:

  • certain pensions and allowances under the Contributions and Benefits Act;
  • certain benefits under the Pension Schemes Act; and
  • certain pensions under Part 1 of the Pensions Act.

The Tax Credits, Child Benefit and Guardian's Allowance Up-rating Regulations 2020

These Regulations increase the:

  • working tax credit; and
  • child tax credit.