The recent Autumn Statement has been released and it introduces certain changes that will have an impact on everyone. However, we should bear in the mind the uncertainty of what BREXIT will bring to us in the near future. A separate section below deals with the Scottish Budget. A summary of the key changes are noted below:
Personal Tax
- Personal allowance increasing to £11,850 from 2018-19
- Higher rate threshold increasing from £45,000 to £46,350 in 2018-19.
- Marriage Allowance claims will now be allowed for deceased partners; backdated by up to 4 years
- A number of NIC policies announced such as abolition of Class 2 NICs and increase in main rate of Class 4 NIC delayed
- The threshold at which employees and employers will start paying National Insurance on weekly earnings is being aligned at above £162
Benefit-in-kind
- No benefit in kind on electricity provided by employers for electric vehicles
- To reduce employer burden from April 2019, no longer requirement to check receipts when reimbursing employees for subsistence using benchmark scale rates
Business Tax
- From April 2017, Limited Company Contractors working in the public sector saw the shift of responsibility to the “Body” paying the worker’s company, for ensuring that the correct taxes are paid. A consultation will take place on possible extension to the private sector
- R&D expenditure credit increased from 11% to 12%
- SDLT higher rates for additional properties to be amended for those increasing share of their own home
- Corporate indexation allowance frozen from 1 January 2018. Accordingly, no relief available for inflation after this date
- VAT threshold to remain at current level of £85,000 for 2 years from April 2018
- Corporation tax rate remains at 19% from 1 April 2018
Rental Business
- Government to publish a call for evidence to establish how rent-a-room relief is used and ensure better target of longer-term lettings
- Allow property businesses to use mileage rates to reduce admin burden
Pensions and Savings
- ISA limit remaining at £20,000
- Starting rate of tax for savings to remain at 0% for the first £5,000
- Lifetime allowance for pension savings increased by CPI to £1,030,000 for 2018-19
- Employees on maternity and parental leave entitled to take 12 month pause from saving into “Save as you Earn” employee share scheme
Other
- Government looking to simplifying taxation of trusts and to make more fair and transparent
- From April 2020, income that non-resident companies receive from UK property will be chargeable to corporation tax rather than income tax
- Fuel duty to remain frozen
- Vehicle Excise Duty supplement will apply to new diesel cars first registered from 1 April 2018
- Company Car tax diesel supplement increasing from 3% to 4% with effect from 6 April 2018. Only applies to diesel cars which do not meet the Real Driving Emissions Stel 2 standards
- Making Tax Digital mandatory from April 2019 for those with turnover above VAT threshold, and then only for VAT obligations
- Reform expected on penalty system for late or missing tax returns, adopting new points-based approach
Scottish Budget
- Changes in Scottish Income Tax Rates and bands for non-savings and non-dividend income:
- Personal Allowance to £13,850 – @ 19%
- £13,850 – £24,000 – @ 20%
- £24,000 – £44,273 – @ 21%
- £44,273 – £150,000 – @ 41%
- Above £150,000 – @ 46%
- Land and Building transaction tax rates and bands kept at current levels, however new relief for first time buyers, with their zero tax threshold increased from £145,000 to £175,000
Please contact us to discuss the Budget In detail.