This Autumn Budget was the first in the new annual tax policy making cycle. It was geared towards stability and certainty for households and follows this Government’s trend to consult in advance of changes.
There were a few key tax measures of interest, which are summarised below:
- The personal allowance will increase to £11,850 for the 2018/19 tax year.
- The higher rate threshold will rise to £46,350 for 2018/19. This will not apply to Scottish taxpayers with any increase to the Scottish higher rate threshold being dealt with separately in the next Scottish Budget.
Savings and Investments
- Capital Gains Tax annual exemption to be increased to £11,700 (£5,850 for most Trusts) from 6th April 2018.
- The reduction of the dividend allowance from £5,000 to £2,000 will go ahead as planned from 6th April 2018.
- The limit for investments in Enterprise Investment Schemes and Venture Capital Trusts will increase to £2m provided any amount over £1m is invested in knowledge intensive companies.
- The pensions lifetime allowance will increase in line with CPI to £1,030,000 from 6th April 2018.
- Further extensions to the disguised remuneration rules will be put in place to ensure participants in avoidance schemes will be subject to UK tax.
- A further consultation was announced in relation to the extension of off-payroll working arrangements to the private sector. Results are expected to be published early 2018.
- The diesel company car supplement will increase to 4%, effective from 6th April 2018
- Rules will be introduced from April 2018 to clarify that charging your electric vehicle at your workplace will not be regarded as a benefit in kind.
- The main rate of research and development expenditure credit will be increased to 12% from 1st January 2018.
- As previously announced, the rules to freeze indexation allowance on corporate capital gains will be implemented from 1st January 2018.
- HMRC have confirmed there are no plans to extend disincorporation relief when it expires on 31st March 2018.
- Legislation will be brought forward to clarify the tax treatment of partners in a partnership. Draft legislation had been issued on 13th September 2017 but, following consultation, further revised legislation will be issued to be more compatible with commercial arrangements and to limit the administrative burden of the changes.
- Previous plans to abolish Class 2 NIC and increase class 4 NIC are not being taken forward at this time. It is expected that these plans will be implemented from April 2019.
Stamp Duty Land Tax
- A new Stamp Duty Land Tax regime has been introduced for first-time buyers, effective from 22nd November 2017. This will give an exemption for a first-time buyer on a property up to £300,000 in value. If the property is valued between £300,000 and £500,000 the rate will be 5% for the excess over £300,000. No relief will apply where the total consideration exceeds £500,000.
- Land and Buildings Transaction Tax in Scotland is a devolved matter. It remains to be seen if similar provisions will be introduced in the next Scottish Budget.