Many planned financial changes had their dates chopped and changed in 2019 due to the uncertainty over Brexit, the general election and the election of a new Prime Minister. Even the Autumn Budget got cancelled and it has now been rescheduled to 11th March 2020.
We have listed below some of the financial changes that will come into force in 2020.

Minimum Wage Increase
The minimum wage is due to increase in April 2020. The hourly rate for the minimum wage depends on age and whether the individual is an apprentice. The National Minimum Wage applies to anyone who is of at least school leaving age and the National Living Wage applies to anyone aged 25 or over. The new rates effective from April 2020 are summarised in the table below.

Holiday Pay Entitlement for Workers with Variable Remuneration
From April 2020 there will be a change to the way that holiday pay is calculated for a worker who has variable remuneration (for example, gig or agency workers). At present holiday pay is calculated using the previous 12 weeks’ pay as the reference period. From April 2020, where a worker has been with the employer for at least 52 weeks then the reference period for holiday pay will be increased from 12 weeks to 52 weeks. If they have been employed for less than 52 weeks, then the reference period will be the number of weeks for which the worker has been employed.
All employers will now need to keep a record of employees’ pay for the 52 weeks prior to April 2020 to calculate holiday entitlement and must continue to do so thereafter.

National Insurance – Proposed Changes
Boris Johnson has indicated that in his first conservative budget he intends to raise the employees’ National Insurance threshold from £8,632 in 2019/20 to £9,500 in 2020/21. His first budget will be in March 2020. If enacted, this would mean a saving for employees of £104 per year compared to 2019/20.

Inheritance Tax Residence Nil Rate Band (RNRB) to Rise
There is no inheritance tax to pay if you pass your home to your spouse or civil partner when you die. If you leave your home to another person, it counts towards the value of your estate and tax may be payable if the estate exceeds the tax free basic allowance of £325,000.
If someone died on or after 6 April 2017 and they left their main residence to a direct descendant (children or grandchildren) then their estate may be entitled to a higher tax-free threshold as a result of the Residence Nil Rate Band (“RNRB”). The RNRB is an additional allowance on top of the basic allowance and is being phased in gradually.
The final phasing of this allowance will see the RNRB increase from £150,000 in April 2019 to £175,000 in April 2020. This will mean that with the inheritance tax basic allowance of £325,000 and the RNRB of £175,000 the maximum allowance per person will rise to £500,000. This will be £1 million for a couple leaving their main residence to their spouse or civil partner who then passes it on to a direct descendant.
However, the RNRB is reduced for estates worth more than £2 million. The RNRB will gradually reduce and taper away by £1 for every £2 that the estate is worth over £2 million. For 2020/21 this means that the RNRB is nil for estates worth more than £2.35 million.

Increase in Student Loan Threshold
The repayment threshold for student loans will rise from April 2020 as follows:
• Plan 1: This plan applies to all loans for English and Welsh students who started university before 1 September 2012 and for Scottish and Northern Irish students who started after 1 September 1998. The threshold for Plan 1 payments will increase from £18,935 to £19,390 per annum from April 2020.
• Plan 2: This plan applies to loans for English and Welsh students who started university on or after 1 September 2012. The threshold for Plan 2 payments will increase from £25,725 to £26,575 per annum from April 2020.
• Postgraduate Loans: The threshold for Postgraduate loans will remain unchanged at £21,000 per annum.
For pre-1998 mortgage style loans the annual salary below which you can opt not to repay your loan is set at £32,347 per annum for the period 1 September 2019 to 31 August 2020. (This was increased from £30,737 in the previous year.)

Increase in Pension Lifetime Allowance
The Pension Lifetime Allowance increases in line with inflation each year and is expected to increase from £1.055 million to £1.073 million from April 2020. If your pension pot is worth more than the Lifetime Allowance then tax may be payable on the excess.

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