Take part in our new Family Business Survey and have your say! Click here
The Chancellor announced that, in line with their commitment to increase the Personal Allowance to £12,500 and the higher rate threshold to £50,000, they will raise the income tax bands to the following:
The increase in the Personal Allowance is an increase of 3%, which, while welcome, is a fairly standard increase based on CPI. This will result in an income tax reduction of up to £70 per annum for basic rate taxpayers and up to £340 per annum for higher rate taxpayers earning under £100,000 (not taking into account any other impacts).
The 0% starting rate band for savings will remain at its current value of £5,000 for 2018/19.
The National Insurance rate bands have also increased slightly – for example, the lower profits limit for Class 4 contributions for the self employed will rise from £8,164 to £8,424 from April 2018. Class 2 NICs will not be abolished until April 2019.
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.
The duty rates on beer, cider, wine and spirts have also been frozen.
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.
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.
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.
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.
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%.
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
All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.
Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.
Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW
Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW