2019/20 Tax Year: Changes and Allowances

Tax Return

With many business tax rate changes coming into place from 6th April 2019, here is a brief summary of the key points to focus on:


Making Tax Digital for VAT

Although Making Tax Digital for VAT is already in place, there is no requirement for companies to file their first digital VAT return under it before 1st July 2019.

VAT Threshold

The VAT registration threshold has been held at £85,000 for 2019/20.

Tax Reliefs:

Capital Allowances

There is a reduction from 8% to 6% on the rate for the Special Rate Pool (SRP) writing down allowance.

Entrepreneur’s Relief

Beginning 6th April 2019, there will be an increase from one year to two years on the minimum period throughout which certain conditions are required to be met for eligibility to Entrepreneurs Relief.

Apprenticeship Levy

The government has introduced a package of reforms to the apprenticeship levy to bolster employer roles. One example is the £240m provided to bring the co-investment rate for apprenticeship training down from 10% to 5%.

There is also the increase in the amount of the apprentice levy which can be transferred by large companies to smaller ones in the supply chain, up from 10% to 25%.

To give people weighing up their options more choice, there was a further £5m announced for the Institute for Apprenticeships. This allowed them to bring in new standards and update current ones, giving them the ability to offer more courses. Old frameworks will be terminated by the government, bringing new apprenticeships to the same higher-quality standards by the beginning of the 2020/21 academic year.

Corporation Tax

The rate for corporation tax stays at 19% for the 2019/20 tax year, with government plans to reduce it to 17% for the following tax year.

Profit Fragmentation

There is now legislation introduced by the government that will stop UK traders and professionals from avoiding tax by making their taxable business profits occur in territories where lower tax is paid than in the UK.