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The 2017 Autumn Budget

Sarah Hamilton - November 27th, 2017

Whilst the media’s reaction to the autumn budget centred on Philip Hammond’s poor jokes and bad luck at having to deliver the first budget post the June snap election, the Chancellor did make a number of interesting announcements on how the Government is trying to build a country that is “fit for the future”. Notable is the significant support for knowledge intensive businesses and an ambitious programme for new house building.

Despite the grim forecast of a 0.5% fall in the overall economic outlook, there were a number of announcements that will hopefully positively impact many of our clients here at Richard Sexton & Co.

The key changes announced that are of interest include:

Value Added Tax

  • The VAT threshold will be frozen at the current level of £85,000 for at least two years with consultation due as to whether the threshold could be lower at some stage.

Stamp Duty

  • First time buyers will now be exempt from stamp duty up to £300,000, effective immediately.
  • For first time buyers purchasing property below £500,000, the first £300,000 will also be exempt, with 5% paid on only the excess.

Business Tax

  • Any gains realised by non-UK residents relating to disposals of UK commercial property is under consultation and is due to be subject to UK tax from April 2019.

Income Tax and Personal Allowance for 2018/19 tax year

  • The personal allowance will rise in line with inflation from £11,500 to £11,850.
  • Higher-rate tax threshold will also increase to £46,350.

Property Income

  • With effect from 6 April 2017 landlords can choose to use mileage rates as an allowable method for calculating costs incurred in running a property business

Wages

  • The national living wage for over 25s will increase from £7.50 to £7.83 per hour from April 2018.

Marriage Allowance

  • Changes to entitlement conditions have been made so that it is possible to claim Marriage Allowance on a deceased spouse or civil partner and that these claims are now able to now be backdated for up to four years where relevant conditions for entitlement have been met. This change has come into affect from the 29th November 2017

Car Related Benefits

  • Electricity provided by employers to their employees to charge electric cars will also not be charged as a benefit in kind from April 2018.
  • The supplement applied to appropriate percentage used in calculating the taxable benefit based on list price of diesel cars (but not vans) will increase by a further 1% to 4%.

Employee Benefits

  • From April 2019 employees may be reimbursed for subsistence using benchmark rates rather than having to provide specific receipts.

Capital Taxes

  • There is an extension of tax relief for investment in certain Enterprise Investment Companies

Chargeable Gains by Companies

  • The Indexation Allowance available to Companies will be frozen from 1st January 2018, bringing the calculation of chargeable gains more in line with personal tax.

Potential future changes

In addition to these points the Chancellor also outlined the Governments intention to look into:

  • Off-payroll working in the private sector
  • Employment status generally
  • Taxation of Trusts
  • Methods used to reduce tax by splitting income between UK entities.

Watch this space for updates on any measures which may result from these discussions next year!

How can we help?

We are already considering how the full legislation announced will impact our clients here at Richard Sexton & Co, and will hopefully be able to maximise on many of the opportunities available!

If you would like to discuss any of these changes and how they might impact you or your business further we would be pleased to hear from you.  Please get in touch with any one of our team members.

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