On Wednesday 22nd November, Philip Hammond, the Chancellor of the Exchequer delivered his Budget Report 2017

Here’s an overview of the measures most likely to affect you.  Feel free to get in touch if you wish to discuss any of the following in more detail…

Headlines

• Stamp Duty Land Tax abolished for most first-time buyers
• VAT thresholds remains at £85,000 for next 2 years
• Personal Allowance increasing to £11,850
• National Living Wage increasing to £7.83 (for 25 years and over)

Already announced

• Plans for Making Tax Digital have been slowed down
• Class 2 NICs abolition deferred
• Dividend allowance to drop to £2,000 (from £5,000)

Personal taxes

Personal Allowance

As expected the Chancellor increased the personal allowance in line with the government’s commitment to make this £12,500 by 2020

2017/18                £11,500

2018/19                £11,850

• Personal allowance is reduced by £1 for every £2 of taxable income above £100,000.
• The allowance is extinguished where adjusted net income exceeds £123,700 (2018/19).

Tax Bands

Dividend allowance

Beware the dividend allowance will reduce from £5,000 to £2,000 from April 2018,  this will result in the following increase in tax payments for most limited company directors:

• 7.5% = £225 rise
• 32.5% = £975 rise
• 38.1% = £1,143 rise

The Marriage Allowance (where married or in a Civil Partnership)

• Enables transfer of up to 10% of an unused personal allowance
• £237 saving
• Legislation to be changed to permit claims on behalf of the deceased (back date 4 years)
• Available where one partner does not earn more than the personal allowance and neither are higher or additional rate tax payers.

Savings

• Help to save accounts to be withdrawn April 18, but savers can chose to continue saving for a further 2 years
• The £5,000 0% savings band remains available
• BR taxpayers still have £1,000 savings allowance
• HR taxpayers still have a £500 savings allowance
• ISA limit remaining at £20,000

Business Taxes

Corporation Tax

As promised the Chancellor is reducing the rate of Corporation Tax to 17% by 2020, continuing the theme that “Britain is open for business”

01/04/2018         19%

01/04/2019         19%

01/04/2012         17%

National Insurance

• Class 2, abolition to be deferred by 1 year (£2.95 per week)
• Abandoned the Class 4 changes proposed in Spring 2017 (plan was increase to 10% in 2018, then 11% in 2019)
• Class 4, self-employed profits of £8424 – £46350 remain at 9% (+2% on profits over this)
• Employment Allowance to remain at £3,000 pa

Company Cars

• Diesel supplement on BIK calculations increased from 3% to 4% from April 2018
• Use HMRC online checker  for the tax charge based on your vehicle’s Co2 emissions

Capital gains rates

Capital gains tax is payable on the profit you make when you sell an asset:

• Annual exemption for 2018/19 increasing to £11,700 (in 2017/18 the allowance is £11,300)
• 10% tax on gains in the basic rate band, and
• 20% tax on gains above the basic rate band
• Higher rates apply to gains on residential property (18% & 28%)
• The 30-day payment window for residential property has been deferred by 1 year to April 2020, until then tax is payable on 31^st Jan.

First time buyers

Stamp Duty reprieve

• Government announced first time buyers will not pay SDLT on purchases up to £300,000
• Must be residential property
• Total property price must be below £500,000
• Came into effect 22 November 2017

And finally…

Booze

Duties on alcohol will continue to be frozen – great news for those us looking forward to a Christmas sherry or two!

Reference

For the full Budget Report 2016 report visit https://www.gov.uk/government/publications/autumn-budget-2017-documents/autumn-budget-2017

To discuss how the Budget Report 2017 will impact your business give us a call on 01737 652 852.

DISCLAIMER – The information contained in this summary has been compiled with every effort made to ensure its accuracy.  Your tax position will depend on your personal circumstances.