UK Budget predictions 2020 - Employment Taxes

Brian Rudkin

Brian Rudkin

Director and Head of Employer Services

Despite the controversy and confusion and pre-election promises of a review it looks certain that IR35 will be implemented as planned on April 6. The recent consultation has closed, and the government are pressing ahead. However, there still remains a strong call for Rishi Sunak to halt the process, with demonstrations taking place outside Westminster and commentators lambasting the plans but this seems certain to be ignored.

IR35 will bring a significant change to the way in which employers engage and pay contractors across many business sectors. That will bring with it many challenges for employers who will have to manage the administration and tax complexities involved in complying with IR35.  Further clarity on operational aspects of IR35 is expected and is urgently needed for many businesses currently struggling with the finer detail.

We also expect 2020 to be as busy as previous years for other employment tax related changes with a number of planned and not-so-planned changes in the pipeline.

Further tweaks to benefit in kind tax rules are expected, most notably in the area of company vehicles where previously published new company car tax bands will be introduced for ultra-low emission vehicles from 6 April. It may be worthwhile for companies to review their current car fleets and whether these are tax efficient.

Speculation continues as to whether further changes will be made to the company van tax legislation in relation to double-cab pickup vehicles and panel vans. But in light of everything else that is happening this year, it may be that the government is not ready to embark on the journey of reaching a decision.

Other notable changes ahead include a revamp of the tax rules for the reporting of Short Term Business Visitors to the UK under a new Appendix 8 agreement from April 6 and also a reform of the eligibility rules for the Employment Allowance.

Amended regulations are also expected in relation to national minimum wage compliance rules following the recent publication of the Government’s response to a consultation on compliance problem areas. Whether these amendments go far enough to make the regulations more workable for employers remains to be seen.

Change in this area is certainly long overdue and when it comes, our Employment Taxes team are on-hand to help you make the right choices for your employees and business.

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