The number of employment and pensions tax related announcements in the 2020 UK Budget were limited in both number and scope.
Key highlights include:
Off-Payroll Working Rules in the Private Sector
Having recently concluded a review into the forthcoming reforms of the IR35 off-payroll working rules, the Government has confirmed that there is to be no delay in their implementation, with the changes taking effect from 6 April 2020.
Enterprise Management Incentives
The Government will review the current EMI scheme to ensure that it provides support for high-growth companies in recruiting talent, with a focus on whether or not more companies should be able to access the EMI scheme. Further updates will be published on this once more details on this review are announced by the Government.
Pension Annual Allowance Tapering
The Government has announced changes to the tapering of pension annual allowance thresholds from April 2020. For those individuals with total income over £300,000, their annual allowance can now taper down to a minimum of £4,000 (a £6,000 reduction from the current £10,000 minimum). However, the two taper annual allowance thresholds are each being raised by £90,000, meaning that individuals with total income below £200,000 (up from £110,00) will not be impacted by tapered annual allowances, and the annual allowances will only begin to taper down for individuals who also have adjusted income above £240,000 (up from £150,000).
National Insurance Contributions
The Government has announced that from April 2020 the thresholds at which employees and the self-employed start paying national insurance contributions will increase from £8,632 to £9,500.
From April 2020 the employment allowance will increase from £3,000 to £4,000, meaning that qualifying businesses and charities will now be provided with up to £4,000 off their employer national insurance contributions bill.