Following on from the announcement of the 2017 Autumn budget, we have summarised below some of the key points. We have chosen the most popular topics our clients ask about.
Personal allowance is set to increase in April 2018 by a small amount of £350, from £11,500 to £11,850; the higher tax rate band will be £46,350. The rules on IR35 provisions for contractors will also be review in 2018.
As of the 1st January 2018, the indexation allowance for capital gains for corporates will be frozen. After 22nd November until the 31st December 2017, the indexation relief will still be applicable for disposals.
The £5,000 saving allowance subject to the 0% starting rate of tax is unchanged for 2018-2019. This is also the same for ISA (£20,000) limits however the Junior ISAs and children’s Trusts will increase to £4,260.
Employee Business Expenses – HMRC will decide on how to provide best practice for employee expenses especially travel and subsistence. They will also provide guidance on claiming tax relief for non-reimbursed expenses.
There will also be a change to Tax relief for employees and the self-employed for training costs.
The fuel benefit charge for vans has increased to £633 and the flat rate benefit charge has also increased to £3,350. The multiplier for the car fuel benefit change has increased as well to £23,400.
The 3% diesel supplement for calculating taxable fuel benefits will increase by 1% by the 6th April 2018. The maximum percentage will remain unchanged at 37%. Its predicted that over 800,000 company car drivers will be affected.
NOx emission cars (<80mg/Km) will not be affected however its believed that very few cars will meet the new EU standards.
Mileage rates for landlords – as of 6th April 2017 the option to use approved mileage rates for business travel will be available to landlords.
The level of £85,000 for value-added tax will stay the same from April 2018 for two years while the threshold is discussed.
There was talk that pensions would be affected this year, however, we are pleased to report that there are no changes for the Annual Allowance or tax relief contributions; however, it has been confirmed that Lifetime Allowance will increase in April 2018.
There is an increase to £1,030,000 for lifetime allowance for pension savings.
Stamp Duty Land Tax will be nil for first-time buyers purchasing properties up to £300,000; this is estimated to remove stamp duty for roughly 80% of first-time buyers.
A 30-day window for paying tax on gains from disposal of residential property will be introduced in April 2020.
The income from UK property received by non-resident companies will be chargeable to corporation tax instead of income tax from April 2020.
Enterprise Investment Schemes (EIS)
There are new rules now that exclude tax-motivated investments, the relief is for the investor with a small risk to the initial investment. A balanced view must be considered as to whether the investment has been designed to have a low-risk return for the investor.
Businesses that import goods from the EU already benefit from postponed accounting for VAT. This cash flow advantage will be reviewed following Brexit.