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UK Announces Plastics Tax, Business Rates Relief In 2020 Budget

Tuesday, March 17, 2020

The UK's 2020 Budget, released on March 11, 2020, includes proposals to waive business rates on small retailers, to introduce a new tax on plastics, and to remove value-added tax on electronic publications.

The Government announced that any eligible retail, leisure, or hospitality business with a rateable value below GBP51,000 (USD65,670) will, over the next financial year, pay no business rates, the UK's commercial property tax. Further, it has announced that it will provide support for businesses struggling with paying their tax dues, by "scaling up" the Time to Pay service.

The Budget further announces that the Employment Allowance will be hiked by a third to GBP4,000, the structures and building allowance will be increased from two percent to three percent, and the research and development expenditure credit will be increased from 12 percent to 13 percent.

In the area of value-added tax, the Budget confirms that VAT will be removed on supplies of electronic publications, in line with the rate for tangible publications, and VAT will be removed on female sanitary products, which is not yet permitted under EU rules.

The Budget announces that funds for anti tax avoidance and evasion efforts will be increased, in a bid to secure extra revenue of GBP4.4bn to fund the National Health Service.

Finally, the Budget includes a number of environmental tax changes. From April 2020, the Climate Change Levy will be frozen on electricity and raised on gas to align the rates. The Government intends to remove the concessionary fuel tax rate, provided under the Red Diesel scheme, for many economic sectors. Further, the Government will introduce new tax breaks for zero or low emissions cars, vans, motorbikes and taxis. Last, a tax on plastics will be introduced from April 2022, at a rate of GBP200/tonne on packing made up of less than 30 percent recycled plastics.