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.