Autumn Budget 2017: The Highlights
On 22 November 2017, the Chancellor of the Exchequer published the Autumn Budget 2017 – the second budget of the year.
Here are the highlights:
Personal Tax Rates
- Personal allowance will rise from £11,500 to £11,850, from 2018/19
- The basic rate threshold will be increased to £34,500, from 2018/19.
- Pension lifetime allowance will rise to £1,030,000, from 2018/19.
- Annual exemption for capital gains tax (CGT) will rise to £11,700, from 2018/19.
- From 29 November 2017, marriage allowance transfer claims can be made on behalf of deceased spouses, and backdated for up to 4 years.
Stamp Duty Land Tax (SDLT)
- Effective from 22 November 2017, SDLT will be abolished on homes under £300,000 for first-time buyers. The existing rate of 5% will apply between £300,000 and £500,000. The relief is not available for properties valued above £500,000 and the purchaser must intend to occupy the property as their only/main residence.
- Anti-avoidance loopholes for the SDLT surcharge will be closed.
- The SDLT surcharge will be disregarded where the person sells the property to their spouse and relief will be offered to remove some unintended consequences; e.g. where an individual is required to retain property on divorce under property adjustment orders.
- Extension of Non-Resident Capital Gains Tax (NRCGT) to all immovable property, including commercial property from April 2019.
- The proposed payment of CGT on residential property within 30 days of sale will be delayed until 2020.
- The amount that an individual can invest in an Enterprise Investment Scheme (EIS) has been increased from £1m to £2m, provided the excess over £1m is invested in “knowledge intensive companies”.
- It was confirmed that foreign service relief will be abolished for termination payments received after 6 April 2018.
- Corporation tax is set at 19% for the FY starting 1 April 2018 and 2019, reducing to 18% from 2020 onwards.
Capital Gains – Indexation Allowance
- The indexation allowance for companies selling assets will be frozen from 1 January 2018, meaning that relief will not be available to account for inflation accruing after this date when calculating chargeable gains.
- VAT registration limit will remain at £85,000 for a further 2 years.
- Market Place Operators (i.e. companies such as Amazon, eBay, and Gumtree) will be held jointly and severally liable if a trader operating through their platform is not operating UK VAT correctly. Furthermore, MPOs must now arrange for the VAT number of the trader to be shown clearly when an individual purchases an item.
- The government have indicated that the recent changes to IR35 for individuals working for the public sector may be extended to the private sector, with a consultation due to be published in 2018.
- R&D expenditure credit for large companies will be increased from 11% to 12%.
Employee Tax Issues
- Increase in the diesel car supplement from 3% to 4% for the purposes of calculating the taxable benefits in kind (BIK).
- The zero emission electric cars BIK up from 9% to 13% from 6 April 2018.
- From April 2018, employer provided electricity for electric cars owned by employees will be an exempt BIK.