The Chancellor Philip Hammond revealed his Autumn Budget 2017, the first in a new annual cycle which largely focused on the state of the economy and public finances.
It was considered prior to the announcement that the Chancellor had little room for maneuver and faced challenges from all angles. Would the Chancellor be bold with his budget? Who would be the winners and losers?
Unfortunately, the budget didn’t introduce any significant surprises and if you were to choose a winner from this budget it would be First time buyers!
The key points from the Autumn Budget 2017 are summarised below:
- Personal Tax^ – an individuals personal allowance will increase from £11,500 to £11,850 in 2018/19. The higher rate threshold will also increase from £43,000 to £46,350.
- VAT registration threshold – plans to reduce the threshold were abandoned for at least two years.
- National Living Wage – this will be increased from £7.50 to £7.83 per hour from April 2018.
- Research & Development Expenditure – tax credits will increase to 12% (from 11%) from April 2018.
- First time buyers – from today, first time buyers will not pay Stamp Duty on the first £300,000 of a property with a purchase price of £500,000 or less.
- Diesel cars – from April 2018, Vehicle Excise Duty on cars will rise by one band which do not meet latest standards.
- Electric vehicles – from April 2018, no benefit in kind will arise for employees charging their electric vehicles at the workplace.
- Council Tax – 100% premium could be levied on empty properties.
- Business Rates – rises to be linked to Consumer Price Index (CPI) as opposed to Retail Price Index (RPI) from 2018. Business affected by ‘Staircase Tax’ may be able to get their original bills reinstated and backdated.
- Business Rates for Public Houses – £1,000 discount on business rates available from 1st April 2017 will be extended into 2018.
- Online VAT fraud – For any goods/services supplied via an online marketplace, the marketplace will be jointly liable to ensure that the seller accounts for the VAT correctly.
- Digital Royalties – As part of a tax avoidance clampdown, digital royalties relating to UK sales but paid to low tax jurisdictions will be subject to income tax in the UK.
- Company’s Indexation allowance – will be removed from January 2018 onwards.
No changes were made to the previous announcements in the following areas:
- Dividend allowance – this will reduce to £2,000 from the 2018/19 tax year.
- Corporation Tax – the tax rate will remain at 19% until 1 April 2020, it has previously been announced it will reduce to 17%.
- Corporation Tax losses – Losses can continue to be offset against 100% of profits of up to £5 million. Losses can only be offset against 50% of profits above this amount.
If you have any questions on how the budget will affect you or your company please do not hesitate to get in touch.
^Please note that the tax rates for Scotland will be released as part of the Scottish Budget on 14th December 2017.