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Spring Budget 2020: Expectations

11th March 2020

Chancellor Rishi Sunak will deliver his Spring Budget speech this afternoon, just 27 days after succeeding Sajid Javid. 

It’s been a whirlwind month for the new Chancellor, who rewrote Javid’s speech before coronavirus forced another urgent rethink. 

Whether or not Sunak rings the changes so close to the end of 2019/20 remains to be seen, and a bigger Budget seems more likely in the autumn.

With the rumour mill in overdrive since last autumn, prior to the cancellation of Budget 2019, what could the Chancellor announce today?

Tapered allowance 

High earners could be set to receive a tax boost on their pension contributions when 2020/21 gets under way on 6 April.

Currently, those who earn more than £110,000 a year risk having their tax-free annual pensions allowance tapered from £40,000 to £10,000.

Sunak looks set to raise the point at which the tapered annual allowance kicks in from £110,000 to £150,000. 

Entrepreneurs’ relief 

“Review and reform” to this capital gains tax break was promised in the Conservative election manifesto late last year. 

Prime Minister Boris Johnson has since gone a step further, saying “changes to entrepreneurs' relief could be more drastic and more imminent”.

Judging by those comments, this relief seems under threat from Sunak although tweaks may me more likely. 

Inheritance tax

It only seems fitting with the Cheltenham Festival also going on this week that we talk about an outside bet.

Javid was believed to be planning an inheritance tax shake-up prior to his Valentine’s Day resignation. 

Armed with two reports containing recommendations from the Office for Tax Simplification, it’s not beyond the realms of possibility that Sunak could follow suit.

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