AUTUMN BUDGET 2017
Philip Hammond has unveiled a gloomy forecast for Britain’s growth and a £3 billion fund to prepare for a no-deal Brexit in his second Budget as Chancellor. But there was some good news for small businesses and some extra funding for the NHS. And first-time buyers will see a huge cut to stamp duty – even though experts say it might raise house prices leaving them back at Square One. The Chancellor attempted to fight back after a shambolic first Budget and months of in-fighting with his own Cabinet over Brexit.
With immediate effect: new announcements
- From 22 November 2017, Stamp Duty Land Tax (SDLT) abolished for first time buyers on homes costing up to £300,000.
- From 29 November 2017, Marriage Allowance can be claimed to transfer the benefit of 10% of the personal allowance after the transferring spouse has died.
- For tax year 2017/18, unincorporated property business landlords will have the option to use simpler fixed rate deductions for miles travelled by car, motorcycle or goods vehicle for business journeys.
- From 6 April 2017, anti-avoidance measures will tackle ‘disguised remuneration’ schemes used by closely controlled companies to remunerate employees who have a material interest.
From 1 January 2018: new announcements
- Indexation allowance will be frozen at January 2018.
- Research and Development Expenditure Credit increases from 11% to 12% with effect from 1 January 2018.
From April 2018: new announcements
- Tax-free personal allowance rises from £11,500 to £11,850; threshold for 40% tax rises from £45,000 to £46,350. Rates and bands for Scottish taxpayers are still to be confirmed by the Scottish Parliament.
- Employees will not be charged income tax on benefit of charging an electric car at work.
- Employees with SAYE-related share option schemes will be able to take a 12-month break from saving, up from 6 months now, while on maternity or paternity leave.
- Abolition of Class 2 National Insurance and reform of Class 4 NIC for self-employed deferred by a year to April 2019 in order to assess impact on contributory benefits.
- Freezing of VAT registration threshold at £85,000 for two years instead of normal £2,000 increase.
- ISA investment limit for 2018/19 unchanged at £20,000; Junior ISA limit rises in line with inflation to £4,260.
- Lifetime Allowance for tax-advantaged pension funds rises from £1m to £1,030,000.
- Increase in Enterprise Investment Scheme investment limit from £1m to £2m, provided any amount over £1m is invested in one or more knowledge-intensive companies.
- Capital Gains Tax annual exempt amount rises from £11,300 to £11,700.
- Annual Tax on Enveloped Dwellings to rise by 3% in line with inflation.
From April 2018: confirmation of previous announcements
- VAT-registered traders to operate ‘Making Tax Digital for VAT’ from April 2019.
- Class 4 National Insurance Contributions increases proposed in March 2017 will not take effect.
- Dividend Allowance, introduced at £5,000 for tax year 2016/17, reduced to £2,000 for 2018/19.
Other significant announcement
- Allocation of £155m in extra resources to HMRC to fund action on the hidden economy, marketed tax avoidance schemes, enablers of tax fraud, non-compliance and collection of debts 9 months overdue.
- The OBR now expects GDP to grow by 1.5% this year, 1.4% in 2018 and 1.3% in 2019 and 2020.
- In addition, government borrowing is set to ‘fall in every year of the forecast’. Borrowing this year will be 2.4% of GDP.
- Inflation is set to rise to 3% during the final quarter of 2017, and will ‘fall back towards target’ over the next year.
The Budget has been announced for getting debt down, by supporting British families and businesses, by investing in the technologies and the skills of the future and creating “Britain Fit for the Future.”