1107 Focus Spring 2020 Print - Page 11



WHAT WILL
2020 BRING?
by Peter Graham
partner in corporate tax at rsm and
chair of chamber business tax and finance forum
2019 was another turbulent year for UK plc. Two
prime ministers, a December general election and
still being part of the EU over three and a half
years after the June 2016 referendum, combined
to present some major political, economic and
business challenges. However, the biggest
surprise of all was that we have ended 2019 with
Conservative MP’s in every constituency in
Stoke-on-Trent and Staffordshire. Whilst some of
these surprises could have been predicted, the
latter one I did not see coming.
So enough about the past (and politics). What
business and tax issues could we face locally in
2020? Unfortunately, as I write this article before
the Christmas break, my crystal ball order from
Amazon has been held up amongst the backlog
of Christmas deliveries. So, I have dusted off the
Conservative Party manifesto to have a more
detailed look at their tax pledges and what the new
majority government will have in store for us all in
2020.
Most of these announcements are positive and I
am sure local businesses will welcome the certainty
they will bring after the last few years of political
uncertainty. I hope the government moves quickly
to increase R&D tax credits and structural and
building allowances as these are both very valuable
tax reliefs that would provide a much needed
cashflow boost to Staffordshire businesses.
The one announcement of concern to business is
the review and reform of Entrepreneurs' Relief.
The important point for the Government to note
is that they continue with their approach of closely
consulting with the business community before
making any significant changes. This will give
the Staffordshire Chambers and local businesses
a chance to share their views on any proposed
changes.
Some of the policies announced were:

a pledge to not increase the rates on income
tax, National Insurance contributions or VAT;

increase in National Insurance threshold
to £9,500 with a pledge to increase this to
£12,500 to be in line with income tax;

increase in employment allowance from £3000
to £4000, that will reduce an employer’s Class
1 secondary National Insurance;

increase in structures and buildings allowance
(introduced on 29 October 2018) from 2 per
cent to 3 percent;

increase in R&D tax credits from 12 per cent to
13 per cent;

Entrepreneurs’ Relief to be reviewed and
reformed: and

retaining Corporation Tax at 19 per cent,
rather than proceeding with scheduled
reduction to 17 per cent with effect from 1
April 2020.
As chair of the Business, Tax and Finance Forum,
one of my key priorities for 2020 will be to lead
on collating the views of local businesses as part
of any consultation process on any changes the
government proposes to make to UK tax law.
RSM UK Tax and Accounting Limited
01782 216000
rsmuk.com
11.

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