Autumn Budget 2017: What it Means For You

As you will no doubt be aware, Philip Hammond revealed his Autumn Budget yesterday afternoon, which largely focused on the state of the economy and public finances.

The key points are summarised below, with more in depth guidance available here.

  • Personal Tax* – Individuals will have a personal allowance of £11,850 in 2018/19. The higher rate threshold will increase 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 to £7.83 per hour from April 2018.
  • Research and Development Expenditure Credit – 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 to rise by one band for cars which do not meet latest standards (this applies to cars only).
  • Company cars – diesel supplement on company car tax to rise to 4%.
  • 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 CPI as opposed to RPI from 2018. Business affected by ‘Staircase Tax’ may be able to get their original bills reinstated and backdated.
  • Business Rates (Public Houses) – £1,000 discount on business rates available from 1st April 2017.
  • 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.
  • 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 1st April 2020, when it will be reduced 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 your company please do not hesitate to contact your accountant.

*Please note that the tax rates for Scotland will be released as part of the Scottish Budget on 14th December 2017.

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