Budget 2020 tax tables: what the government’s changes mean for you

The winners in this year’s Budget are identifiable. First: all earners. An increase in National Insurance Contribution (NIC) thresholds is a welcome move for all employees and the self-employed. The threshold will increase from £8,628 to £9,500, resulting in an annual NIC saving of £104 for employees and £78 for the self-employed.

Those saving for retirement will also gain. From 2020-21, the thresholds used to calculate the tapering of the annual allowance will be increased so that workers with an “adjusted net income” [taxable income] of below £240,000 are not affected by the reduced limits. The annual allowance is the total amount an individual and employer can contribute into their pension fund without incurring a tax charge.

Children under 18 years old will also benefit. The junior ISA and Child Trust Fund annual subscription limits will increase by £4,632 from £4,368 to £9,000 – a massive uplift.

As for the losers, let’s take entrepreneurs. The entrepreneurs’ relief lifetime allowance will be reduced from £10m to £1m affecting an estimated 20 per cent of business owners. Going forward, only the first £1m of capital gains arising on the sale of an individual’s business will be taxed at 10 per cent, with the remaining gain being taxed at 20 per cent. Harsh anti-avoidance rules have also been introduced, backdated from April 2019.

Then there are top earners. Currently individuals with an adjusted net income in excess of £210,000 have their annual allowance tapered to £10,000. From April 2020, the allowance will be tapered to £4,000 for individuals with total income above £300,000. Any excess contributions over the new tapered annual allowance will be subject to tax at 45 per cent.

Companies who invest in plant and machinery will suffer. The favourable – yet temporary – annual investment allowance of £1m will come to an end on 31 December 2020, reducing by 80 per cent to £200,000 per year.

Last, pensioners, the forgotten in this Budget. With no reforms or simplification to inheritance tax announced, with the personal allowance and income tax thresholds remaining unchanged, and as they do not pay NIC, inflation will drag more pensioners into higher taxes. Based on forecasted inflation at 2 per cent, many pensioners will be worse off in real terms.

George Parker and Harriett James are assistant managers at leading accounting and tax advisory firm Blick Rothenberg

Married (or civil partnership) couple, two earners, two children

Salary	Net Income 2019/2020	Net Income 2020/2021	Monthly gain/loss 2020/2021
£10,000	£11,789	£11,820	+3
£15,000	£16,625	£16,760	+11
£20,000	£21,308	£21,443	+11
£25,000	£25,241	£25,377	+11
£30,000	£29,010	£29,250	+20
£35,000	£32,494	£32,733	+20
£40,000	£36,060	£36,300	+20
£45,000	£39,460	£39,700	+20
£50,000	£42,860	£43,100	+20
£60,000	£49,660	£49,900	+20
£70,000	£56,460	£56,700	+20
£80,000	£62,331	£62,560	+19
£90,000	£67,272	£67,480	+17
£100,000	£73,406	£73,613	+17
£125,000	£88,738	£88,947	+17
£150,000	£104,072	£104,280	+17
£175,000	£115,238	£115,447	+17

Married (or civil partnership) couple, one earner, two children

Salary	Net Income 2019/2020	Net Income 2020/2021	Monthly gain/loss 2020/2021
£10,000	£11,625	£11,760	+11
£15,000	£15,775	£15,910	+11
£20,000	£19,175	£19,310	+11
£25,000	£22,575	£22,710	+11
£30,000	£25,975	£26,110	+11
£35,000	£29,375	£29,510	+11
£40,000	£32,775	£32,910	+11
£45,000	£36,175	£36,310	+11
£50,000	£39,325	£39,460	+11
£60,000	£43,336	£43,440	+9
£70,000	£49,136	£49,240	+9
£80,000	£54,936	£55,040	+9
£90,000	£60,736	£60,840	+9
£100,000	£66,536	£66,640	+9
£125,000	£76,036	£76,140	+9
£150,000	£90,536	£90,640	+9
£175,000	£103,786	£103,890	+9

Married pensioners (born after 5th April 1935)

Salary	Net Income 2019/2020	Net Income 2020/2021	Monthly gain/loss 2020/2021
£10,000	£10,000	£10,000	+0
£15,000	£15,000	£15,000	+0
£20,000	£20,083	£20,083	+0
£25,000	£24,417	£24,417	+0
£30,000	£28,750	£28,750	+0
£35,000	£32,833	£32,833	+0
£40,000	£37,000	£37,000	+0
£45,000	£41,000	£41,000	+0
£50,000	£45,000	£45,000	+0
£60,000	£53,000	£53,000	+0
£70,000	£61,000	£61,000	+0
£80,000	£68,333	£68,333	+0
£90,000	£75,000	£75,000	+0
£100,000	£81,667	£81,667	+0
£125,000	£98,333	£98,333	+0
£150,000	£115,000	£115,000	+0
£175,000	£126,667	£126,667	+0

Single pensioner

Salary	Net Income 2019/2020	Net Income 2020/2021	Monthly gain/loss 2020/2021
£10,000	£10,000	£10,000	+0
£15,000	£14,500	£14,500	+0
£20,000	£18,500	£18,500	+0
£25,000	£22,500	£22,500	+0
£30,000	£26,500	£26,500	+0
£35,000	£30,500	£30,500	+0
£40,000	£34,500	£34,500	+0
£45,000	£38,500	£38,500	+0
£50,000	£42,500	£42,500	+0
£60,000	£48,500	£48,500	+0
£70,000	£54,500	£54,500	+0
£80,000	£60,500	£60,500	+0
£90,000	£66,500	£66,500	+0
£100,000	£72,500	£72,500	+0
£125,000	£82,500	£82,500	+0
£150,000	£97,500	£97,500	+0
£175,000	£111,250	£111,250	+0

Single person, no children

Salary	Net Income 2019/2020	Net Income 2020/2021	Monthly gain/loss 2020/2021
£10,000	£9,836	£9,940	+9
£15,000	£13,736	£13,840	+9
£20,000	£17,136	£17,240	+9
£25,000	£20,536	£20,640	+9
£30,000	£23,936	£24,040	+9
£35,000	£27,336	£27,440	+9
£40,000	£30,736	£30,840	+9
£45,000	£34,136	£34,240	+9
£50,000	£37,536	£37,640	+9
£60,000	£43,336	£43,440	+9
£70,000	£49,136	£49,240	+9
£80,000	£54,936	£55,040	+9
£90,000	£60,736	£60,840	+9
£100,000	£66,536	£66,640	+9
£125,000	£76,036	£76,140	+9
£150,000	£90,536	£90,640	+9
£175,000	£103,786	£103,890	+9

Single person, one child

Salary	Net Income 2019/2020	Net Income 2020/2021	Monthly gain/loss 2020/2021
£10,000	£10,912	£11,035	+10
£15,000	£14,812	£14,935	+10
£20,000	£18,212	£18,335	+10
£25,000	£21,612	£21,735	+10
£30,000	£25,012	£25,135	+10
£35,000	£28,412	£28,535	+10
£40,000	£31,812	£31,935	+10
£45,000	£35,212	£35,335	+10
£50,000	£38,612	£38,735	+10
£60,000	£43,336	£43,440	+9
£70,000	£49,136	£49,240	+9
£80,000	£54,936	£55,050	+9
£90,000	£60,736	£60,840	+9
£100,000	£66,536	£66,640	+9
£125,000	£76,036	£76,140	+9
£150,000	£90,536	£90,640	+9
£175,000	£103,786	£103,890	+9

Single person, self-employed

Salary	Net Income 2019/2020	Net Income 2020/2021	Monthly gain/loss 2020/2021
£10,000	£9,721	£9,796	+6
£15,000	£13,771	£13,846	+6
£20,000	£17,321	£17,396	+6
£25,000	£20,871	£20,946	+6
£30,000	£24,421	£24,496	+6
£35,000	£27,971	£28,046	+6
£40,000	£31,521	£31,596	+6
£45,000	£36,071	£35,146	+6
£50,000	£38,621	£38,696	+6
£60,000	£44,421	£44,496	+6
£70,000	£50,221	£50,296	+6
£80,000	£56,021	£56,096	+6
£90,000	£61,821	£61,896	+6
£100,000	£67,621	£67,696	+6
£125,000	£77,121	£77,196	+6
£150,000	£91,621	£91,696	+6
£175,000	£104,871	£104,946	+6

Unmarried couple, both earning

Salary	Net Income 2019/2020	Net Income 2020/2021	Monthly gain/loss 2020/2021
£10,000	£10,000	£10,000	+0
£15,000	£14,836	£14,940	+9
£20,000	£19,269	£19,373	+9
£25,000	£23,202	£23,307	+9
£30,000	£26,972	£27,180	+17
£35,000	£30,705	£30,913	+17
£40,000	£34,272	£34,480	+17
£45,000	£37,672	£37,880	+17
£50,000	£41,072	£41,280	+17
£60,000	£47,872	£48,080	+17
£70,000	£54,672	£54,880	+17
£80,000	£61,138	£61,347	+17
£90,000	£67,272	£67,480	+17
£100,000	£73,405	£73,613	+17
£125,000	£88,738	£88,947	+17
£150,000	£104,072	£104,280	+17
£175,000	£115,238	£115,447	+17

(Blick Rothenberg)

Tables compiled by Paul Haywood-Schiefer ATT at Blick Rothenberg LLP

* Data assumes: where both members of a couple are earning, the income is split two thirds to one third; all earners work 30+ hours; no investment income received; all children under 16; tables include tax credits (working and child tax credits and child benefit where applicable; no pension contributions or gift aid payments; tables do not include blind person’s allowance; transferable allowance only available to married couples and civil partners who are not in receipt of married couple’s allowance, and only where a spouse or civil partner has not used all of their personal allowance and their partner is not a higher or additional rate taxpayer