Individuals

 

National Living Wage

The budget saw another rise in the standard rates for the National Living Wage (NLW) which has become an annual occurrence since its introduction in April 2016 when it replaced, what used to be known as, the National Minimum Wage (NMW).  The rates for the current tax year, 2017/18, and the rates announced for the next tax year, 2018/19, are shown below:

  25 & Over  21-24 18-20 Under 18 Apprentice
2017/18 £7.50 £7.05 £5.60 £4.05 £3.50
2018/19 £7.83 £7.38 £5.90 £4.30 £3.70

Company Car Tax

As expected, the Chancellor wants to promote greener alternatives for employers who provide their employees with a company vehicle.  The emissions scandals, over recent years, involving the testing of diesel vehicles has inadvertently placed them as a primary target on the Chancellor’s agenda.

The standard supplement in relation to Benefit in Kind rates for diesel vehicles will increase by 1% from 3% to 4%, with effect from April 2018.  The main rates, already announced, based upon CO2 emissions remain the same although, consistent with previous years, the percentages increase for lower emission cars.

From April 2018, there will be no Benefit in Kind charge on electricity provided by employers to charge employees’ electric vehicles, regardless of if they are company cars or personally owned by the employees.

The provision of company vehicles has become an increasingly expensive option in recent years and the costs will undoubtedly continue to escalate as the government moves towards a greener future for our country.

Fuel Duty

Fuel duty has been frozen for the eight year in a row, with it being estimated that this will save the average driver £160 a year.

Alcohol Duty

The duty rates on beer, cider, wine and spirts have also been frozen.

Savings

The annual ISA allowance will remain at the current limit of £20,000 but the Junior ISA limit is rising in line with CPI to £4,260 from 6 April 2018.

Annual ISA allowances are use-it or lose-it, so there is no ability to carry forward unused allowances between the tax years.

Further support pledged for first time buyers

Philip Hammond spent some time during his announcement on UK housing issues to provide a firm commitment to assist ownership for the next generation and to ensure that more homes are built in the right places.

To assist first time buyers in getting on the housing ladder, the Chancellor announced the abolishment of Stamp Duty on first time buyer property purchases up to £300,000. In more expensive areas such as London, it will be available on the first £300,000 for properties valued up to £500,000. This means that 80% of first time buyers will pay no Stamp Duty at all.

This is positive news for those saving for their first home and a high proportion of first time buyers will pay no Stamp Duty at all.

Within the documents it was also confirmed that a further £10 billion is being committed to the Help to Buy Equity Loan scheme, which is expected to support a further 135,000 people to buy their first home.

Pension news

It was all rather quiet in relation to pensions in the Budget, which will be a relief to many given the significant changes made over recent years.

Within the Budget documents it was confirmed that the Lifetime Allowance for pension savings will increase to £1,030,000 from 6 April 2018.

This may provide some solace to those with high values being accrued within their pension pots and anyone close to or exceeding the limit should refer to the transitional protections available.

For those in receipt of the basic state pension the triple lock rise from April 2018 will be 3% - equivalent to £3.65 per week for those eligible for the full basic state pension. The full new state pension will also benefit from a rise of £4.80 per week.

Double up on your EIS Investments

As part of his Budget speech today the Chancellor, Philip Hammond, announced plans to further encourage new tech businesses. Together with the promise of over £500million of investment in a range of initiatives such as 5G, full fibre broadband and Artificial Intelligence he published an ‘Action Plan’ to unlock over £20 billion of new investment in UK scale-up businesses.

Part of this ‘Action Plan’ is to double Enterprise Investment Scheme (EIS) limits for, what he termed as ‘knowledge-intensive companies’. However, while the limit will be doubled for investment in this specific type of company, measures will be taken to ensure that EIS is not used as a shelter for low-risk asset backed investments.  

Currently, the maximum investment limit in EIS for which Tax relief is available is £1million, attracting a 30% Income Tax relief and a Capital Gains Tax deferral, if applicable, on investment. Any capital gains made on the EIS shares are also free of Capital Gains Tax if the investment has been held for at least three years.  This measure will increase the annual limit for individuals investing in EIS, including in knowledge-intensive companies, to £2million provided that anything above £1million is invested in the knowledge-intensive companies.

The annual EIS and VCT limit on the amount of tax-advantaged investments a knowledge-intensive company may receive will be increased to £10 million.

The changes for EIS will apply to shares issued on or after 6 April 2018. For VCTs, the changes will apply to new qualifying investments made on or after 6 April 2018.

More upfront support for Universal Credit claimants

The government has announced several measures to help new claimants to Universal Credit (UC):

  • Claimants can apply for a month’s worth of UC within five days of application. This will be in the form of an interest-free loan, repayable over 12 months.
  • Claimants will be eligible from the day of claim rather than having to wait for seven days.
  • Individuals currently on Housing Benefit (HB) will continue to receive it for two weeks after making a claim for UC.
  • Households in areas where private rents have been rising fastest will receive an extra £280 of HB or UC.

Council Tax

Local authorities currently have the power to charge a 50% Council Tax premium on empty houses. This is to encourage owners to bring them back into use. This premium is to be increased to 100%.

Our handy Tax Facts Pocket Guide provides you with the rates and figures you need to manage your personal and business finances.

Autumn Budget News

Budget Highlights for UK Manufacturing

Whilst the recent budget didn’t throw up any significant headline announcements for our Manufacturing Sector, there were various items outlined which should have a positive impact on the sector, including: Research & Development

Budget Review for Retail Sector

There are number of areas in the Autumn Budget that will impact on the retail sector.

Impact of the Budget for Family Businesses

It will come with little surprise that the second budget of 2017 failed to offer significant headline announcements, despite the rumour mill going in to overdrive during the past few days.

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