22 November 2017, approximately 12:30pm and the Chancellor of the Exchequer Phillip Hammond stood up in the House of Commons to announce the economic performance figures and forecasts, as well as outlining the current government’s plans over the coming years. This is often a hotly anticipated time of year for tax advisers
, as the new tax legislation and rules are broadcasted to the general public.
Amongst all the talk of Brexit and a ‘Fit for the Future’ budget, there actually wasn’t a lot that has got the tax world excited (this isn’t to say that nothing happened however).
Here we highlight some of the key announcements:
Further to the Conservatives commitment to increase the total income an individual can earn before paying any tax to £12,500 per annum, Mr Hammond announced that as of 6 April 2018, the new personal allowance would be set at £11,850. Additionally, the higher rate threshold where you start to pay 40%, was increased to £46,350.
This intends to increase the NET wages of individuals in the UK, where they are entitled to the personal allowance. This is the amount of money you can earn free of income tax.
An example is that if you remain on a £30,000 annual salary, you will now be better off by £70 for the next tax year.
In line with increasing personal allowance, the government also proposed the minimum wage to be increased by 4.4%, to £7.83 per hour as of April 2018.
Stamp Duty and Housing
In order to increase the affordability and attractiveness of acquiring a property
for first time buyers, stamp duty will be abolished for any property that is acquired at a value of less than £300,000.
For those properties in London and in other expensive areas, the first £300,000 will be exempt from SDLT but only for properties valued up to a maximum of £500,000.
This would reduce the total SDLT payable by first time buyers by up to £5,000.
There were other highlights within this section of the budget day speech, with Councils now being given the power to levy a 100% council tax premium on empty properties.
This is a key area for the UK, to ensure the economy will keep performing well over the coming years. It also looks set to be a competitive area during times of Brexit. The government used the speech to focus on making businesses more competitive.
One major announcement was in relation to VAT (Value Added Tax) as it was announced that the VAT registration threshold for small business
would remain at £85,000 per annum for the next 2 years. This was despite pressure to reduce the registration threshold.
For large corporations that are spending on Research and Development, there would be an increase in the amount of credits available to them. This was previously 11% but has since been increased to 12%.
For those companies who offer Diesel Company cars, they will now face a larger Benefit In Kind (BIK) tax charge. The additional surcharge on these cars would rise from 3% over petrol cars to 4% starting from April 2018.
As you can see, there are many different proposals which are set to be implemented over the coming months by the Conservative Government. As such, if you want to find out more about the budget and how these changes might well affect you, then please feel free to contact our budget specialists on 020 8429 9245 or email [email protected]