Chancellor Philip Hammond delivered his latest Budget on 22nd November 2017 and expressed a resolve to look forwards and not backwards, preparing for a Post-Brexit economy through raising productivity. The economic forecasts outlined by the Office for Budget Responsibility (OBR) for growth have been downgraded from 2% a year to 1.5% in 2017, 1.4% in 2018, 1.3% in 2019 & 2020, before increasing to 1.5% and finally 1.6% in 2022.
Overall, this Budget was again light on new announcements related to financial planning, with a focus on small businesses and the younger in our society.
Key measures announced for businesses:
- Headline rate of corporation tax will remain at 19 per cent from April 2018.
- Rate rises for businesses to be determined by CPI, rather than RPI, from April 2018.
- The lifetime funding limit for Venture Capital Schemes is £12m for most companies and £20m for knowledge-intensive companies.
- From 1 January 2018 the Research and Development Expenditure Credit (RDEC) will increase to 12%.
- £1,000 business rate discount for pubs with a rateable value of up to £100,000, for one year from April 2018.
- National living wage for workers aged 25 and over will increase from £7.50 to £7.83 an hour from April 2018.
- From 6 April 2018 the government will allow employees on maternity and parental leave to take a pause of up to 12 months from saving into their save-as-you-earn employee share scheme.
- Landfill Tax is set to be calculated according to the weight and the type of waste deposited for England and Northern Ireland.
- Standard rate of insurance premium tax to remain at 12 per cent from 1 June 2018 (as announced in the Autumn Statement 2016).
Key measures announced for individuals:
- The Tax-free personal allowance is set to increase from £11,500 to £11,850 from 6 April 2018. Higher rate threshold to increase to £46,350, although different thresholds may apply in Scotland.
- As previously announced, the outlined plan to increase class 4 National Insurance Contributions (NICs) from 9% to 10% in April 2018 and then to 11% will no longer proceed.
- The planned abolition of Class 2 NICs is delayed until April 2019.
- The Capital Gains Tax (CGT) annual allowance will increase from £11,300 to £11,700 for individuals and from £5,650 to £5,850 for most trustees of a settlement from 6 April 2018.
- Legislation set to be introduced in the Finance Bill will allow individuals whose spouse or civil partner is deceased to make a claim for Marriage Allowance. This can be backdated up to 4 years, providing the criteria are met.
- The amount an individual can invest under the Enterprise Investment Scheme (EIS) in knowledge – intensive- companies is set to rise to £2m from 6 April 2018.
- Individuals who have their employment terminated on or after 6 April 2018 will no longer be able to claim foreign service relief if they are a UK resident in the tax year of termination.
- The National Productivity Investment Fund will be extended for a further year, with funding increased to £31bn
- A further £23bn will be invested in R&D.
- Heavy investment in electric vehicle technology, including £400m for charging infrastructure.
- Further to the last budgets announcement of T-levels for technical education, the chancellor has now committed £20m to support further education colleges to prepare for these courses.
- £2.7bn has been committed to more than double the Housing Infrastructure Fund.
- A new Stamp Duty Land Tax is to be introduced in England, Wales and Northern Ireland that raises the price at which a property is liable for SDLT to £300,000.
- Tobacco Product Duty will see product costs increasing 2% above RPI inflation from 22 November 2017.
For more details please download our Autumn Statement report.
The way in which tax charges (or tax relief, as appropriate) are applied depends upon individual circumstances and may be subject to change in the future. The information in this report is based upon our understanding of the Chancellor’s Autumn Statement 2017, in respect of which specific implementation details may change when the final legislation and supporting documentation are published. This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. You should not make any investment decisions based upon its content. ISA and pensions eligibility depend on personal circumstances. The value of investments can fall as well as rise and you may not get back the full amount you originally invested. Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information. All tax tables include numbers, rates and allowances only. None of the usual qualifying notes are included in this report.