Budget 2020: a time of crisis. With the UK government concentrating all its efforts on dealing with the Covid-19 virus, Chancellor Rishi Sunak's Budget 2020 was short on tax giveaways.

The Chancellor's reduction in the lifetime limit for Entrepreneurs' Relief was not a huge shock. It does come with certain measures that are designed to block schemes that aimed to bank the relief in case of such a change.

As the virus pretty well dominates all budgetary planning and forecasting for the foreseeable future, it is worth highlighting the Budget 2020 tax breaks given to SME businesses to assist in dealing with its on-going disruptions. Small business employers, those employing up to 250 staff, are being given government financial assistance with their Statutory Sick Pay (SSP).

No such help is offered to self-employed traders, although tax credits are available when all else fails. It is worth pointing out that Personal Service Company (PSC) owners who are within the off-payroll working rules will have to account for their own SSP. In theory, they may reclaim it from the government, as a small employer. Their end client is not required to pay SSP, unless contractually bound. 

A small increase was announced in the employee home working allowance, taking it up to £6 per week. There was no similar announcement for self-employed homeworkers.

Employers may already provide their workforce with tax-free health checks. Budget 2020 extends the tax-free medical treatment to include related medical treatment, such as cognitive behavioural therapy (CBT), when provided to an employee as part of an employer’s welfare counselling services. Covid-related stress is likely to be as disruptive as the virus itself: have I got it? What's the latest news? What will it do now? etc. 

HMRC are being given instruction to be more generous in negotiating Time to Pay agreements for those who build up tax debts as a result of the virus. 

Most people will not notice that they have the virus and we hope that most people will remain healthy and positive. 

If you have any tax-specific queries, please post them up to our sister site www.VtaxP.co.uk

Back soon

Nichola Ross Martin FCA CTA (Fellow) Tax Director


Your Virtual Tax Partner® online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.

Quick news & guides (freeview)

Budget 2020: At a glance
A summary of the key measures included in yesterday's Budget 2020 publications. 

Budget 2020: Entrepreneurs' Relief
A reduction in the lifetime limit together with special measures to combat planning arrangements intended to prevent changes to the relief from taking immediate effect.

Budget 2020: Live Speech Highlights
If you missed the actual event, here are the highlights of the speech.

MVD: Penalties to be charged from April 2020
Making Tax Digital for VAT (MVD) was introduced for the first VAT accounting periods commencing on or after 1 April 2019. To date, no penalties have been charged but that is about to change. 

Editor's pick (subscribers)

Directors: working from home
What can directors claim? How do their claims differ from other employees? What are the differences between a director's claim and a self-employed individual's claim?

Self-employed: working from home
What expenses can you claim for working from home, if you are self-employed? Are there special rules and precedents for certain types of trade or profession?

Employees: working from home
The rules for working from home are different if you are employed compared with being self-employed. A guide for employers and employees.

Employer guide: medical benefits and health checks
Test, testing, a guide to the tax treatment of medical health checks and treatments.

Cycles & cyclists' safety equipment
What tax breaks are available to you and your staff if you provide your workforce with eco-travel solutions?

Cases (freeview)

Good Morning IR35: Eamonn Holmes loses employment status case
In Red, White and Green Limited v HMRC [2020] TC7603, the First Tier Tribunal (FTT) held that income received by Eamonn Holmes’ Personal Service Company was within IR35. If he had provided services directly to ITV it would have been a contract of employment.

Project manager loses IR35 case
In Northern Lights Solutions Limited v HMRC [2020] TC7594, the First Tier Tribunal (FTT) held that IR35 applied to a project manager’s Personal Service Company. He was subject to overarching controls consistent with being a highly skilled employee.

VAT Cases (freeview)

College building not eligible for charitable VAT exemption
In Madinatul Uloom Al Islamiya ('the College') v HMRC [2019] TC07433, the First Tier Tribunal (FTT), found that the construction of a new multi-functional hall did not qualify for VAT zero-rating. 

Virtual Tax Partner Toolkits (freeview)

Virtual Tax Partner © Tax Toolkit© Tax Toolkits
NEW: be a winner with our game-changing tax diagnostics tools. Sign up now.

  • Entrepreneurs' Relief: Sole traders: sale of a business, incorporation, sale of assets
  • Entrepreneurs' Relief: Company owners: rules for sales pre 29 October 2018, sales between 29 October 2018 and 5 April 2019 and after.
  • TAAR: closing your Personal service company? Will your final dividends be taxed as income?
  • Salary or dividend, or a mixture of both. Better to claim the Employers' Allowance?
  • Making Tax Digital for VAT: when do you need to join.

Tax Queries?

Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a very wide range of expertise: covering direct and indirect tax, as well as accounting, R&D claims, reorganisations and much more. 

CPD for lunch 

Byte-sized chunks of CPD for subscribers

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 5 March 2020

  • Trusts and Estates: What’s New? Spring 2020
  • HMRC warns about off-payroll working tax avoidance schemes
  • Report on review of changes to the off-payroll working rules
  • EMI: Enterprise Management Incentive scheme
  • ABC or alphabet shares: directors & employees
  • Scheme to transfer pension into residential property funds results in 40% tax charge
  • Sale of shares was capital but company was not trading
  • Recruitment agency not liable for payroller's PAYE
  • DIY Builder's VAT claim allowed despite certification delay and change of use


Come and join our Cloud

Subscribe (and UNLOCK the whole site) A single user annual subscription is £399 (+ VAT).

What do you get?

  • We keep YOU up to date in SME tax.
  • FULL access to www.rossmartin.co.uk: your firm's favourite TAX INTRANET containing over 3,500 actively maintained tax guides, briefings, toolkits and checklists.
  • Want to know more? Commission your own articles and checklists.
  • Structured CPD our detailed SME tax updates "for Advisers Only" provide topical summaries and planning notes our webcasts provide you with structured CPD at your desk.
  • Regular client tax briefings: these cover the latest business and employment tax issues and are designed to assist you plan meetings and improve your client services.