Hammond has delivered his second Budget and whilst not an extensive budget has some key points which we think will affect our clients:
- For employers note that the following changes to the national living wage and national minimum wage from April 2018:
- Aged > 25 £7.83ph from £7.50ph
- Aged 21-24 £7.38ph from £7.05ph
- Aged 18-20 £5.90ph from £5.60ph
- Aged 16-18 £4.20ph from £4.02ph
- Apprentice £3.70ph from £3.50ph
- VAT threshold is not to be reduced as commentators thought, but is to remain at £85,000 for next two years
- However, there are to be new measures to take non-registration and payment of VAT by online digital traders
- Business Rates will increase in line with CPI rather than RPI which is a positive step and any businesses affected by the “staircase tax” (where they have two or more ‘offices’ which are accessed by communal stairs or corridors) will have their previous rates value reinstated
- For freelancers and contractors no plans were stated about IR35 reforms to the private sector (as happened with the public sector from April 2017) – however a proposed consultation is mentioned in the chancellor’s “red book”, so may well occur in the future
- £500m is to be invested in 5g mobile networks, artificial intelligence and full fibre broadband
- Further investments to support electrical cars and charging points, including confirmation that if staff use electrical charging points at work; it will not be classed as a benefit in kind (BIK)
- From 1/1/18 an additional £2.3bn will be available to fund an increase in the research and development tax credit (from 11% to 12%) for large companies – unchanged for small companies
- An individual’s tax free personal allowance will increase from £11,500 to £11,850 in April 2018
- Correspondingly the higher rate threshold increases to £46,350 (from £43,500)
- The planned fuel duty rise in April 2018 for diesel and petrol cars has been scrapped
- For clients with diesel company cars, the supplement in the BIK calculations is to increase by 1% furthering the expense of having a company car
- The weekly state pension rises to £125.95pw from April, and those under the new state pension will see a rise to £164.35pw.
- The pensions lifetime allowance will increase from April 2018 to £1,030,000
- The capital gains tax exemption threshold for 2018/19 will be £11,700 from £11,300.
- Councils will be given powers to charge a 100% council tax premium on vacant properties – no criteria has been issued yet, but this may affect our landlord clients with properties that are empty.
- New taskforce for homelessness – potentially benefits or grants for landlords who may take use their properties to house disadvantaged persons.
For Moore Accountancy’s more local clients – there is further devolution of powers to Greater Manchester meaning the GMCA has more autonomy to help the needs of the people in the area.
And finally, with the start of the Christmas season it is good to know that duty on beer, wine and spirits will be frozen – worth raising a glass for (or for drinking whilst you read the OOTLAR – the technical detail of each tax policy measure announced….)
If you have any questions or concerns after this budget update then please give the team a call on 07542299247 or email us at email@example.com