Budget 2018

The Chancellor delivered a bullish budget, which will be good news for many…

The main highlight of the budget was left to the end of the speech (which lasted almost an hour and a quarter) – the Personal allowance is being increased to £12,500 and the HRT threshold to £50,000 from April 2019, earlier than had previously been planned. This is billed as being a tax cut for 32 million people.

The other main points of interest from our point of view are as follows;

  • The AIA is being increased to £1m for 2 years
  • A new relief is being introduced when new non residential structures are acquired
  • A new relief for acquiring IP rich businesses was announced
  • An extension to enterprise allowance for start up businesses was announced.
  • The Government are keen to incentivise employers to take on staff. From April 2020 the employment allowance will be increased. Employers costs of hiring through an apprenticeship scheme are to be halved.
  • Changes are going to be made to main residence relief. Scope for claiming lettings relief will be restricted. Deemed period of exemption to be reduced from 18 months to 9 months.
  • Entitlement to Entrepreneurs’ Relief largely to be unchanged, but holding period requirement will be extended from 12 months to 24 months.
  • VAT threshold to remain unchanged for a further 2 years.
  • IR35 restrictions to be extended to private sector from April 2020. This will only apply when the services of an individual are provided through a limited company to a medium or large business.
  • Changes will be made to the SME R&D scheme – a PAYE restriction will be applied.
  • SDLT exemption for first time buyers with shared ownership extended to £500,000. This change is to have retrospective effect.
  • HMRC are being granted preferred creditor status.
  • Plans were announced to implement a new digital services tax. Intention to target companies with global revenues exceeding £500m.
  • Fuel duties are being frozen.
  • Beer, cider and spirits duty for is also being frozen next year. Duty on wine to go up.

As ever no doubt more detail will materialise once we have had a chance to scrutinise the small print. Please contact Tom Foster should any of the proposed changes be of interest to you.