AUTUMN BUDGET 2017

December 1, 2017

The latest offering from Phillip Hammond was more for the purists than for the headline writers, however, he will have made some friends with his reduction in Stamp Duty for First Time Buyers and lost some with his freezing of the indexation allowance for companies making capital asset disposals from 1st January 2018.

 

Here are the main highlights:

 

STAMP DUTY

 

For First Time Buyers, stamp duty on properties costing up to £300,000 or on the first £300,000 of a property costing up to £500,000, is to be abolished.

 

CORPORATION TAX

 

The Chancellor is freezing the Indexation Allowance for companies making capital asset disposals from 1st January 2018.

 

INCOME TAX

 

The Chancellor has continued with his intention to increase the personal allowance to £12,500 over time, with an increase to £11,850.

 

He is also increasing the higher rate tax threshold to £46,350.

 

IN OTHER NEWS

 

ELECTRIC CARS

 

Where electric charging points are provided at work by an employer, no benefit in kind will be due.

 

BUSINESS RATES INCREASES

 

Business rates are to increase in future by reference to the lower CPI rather than RPI.

 

RESEARCH AND DEVELOPMENT TAX CREDIT

 

To support Research and Development, the tax credit is to be increased to 12%.

 

MAKING TAX DIGITAL

 

Making Tax Digital is to go live from April 2019 for Vat registered businesses for their Vat affairs only. For other taxes the intention is to commence Making Tax Digital from April 2020 but only if the system is demonstrated to be working properly. Clearly there is some doubt!


NATIONAL INSURANCE CHANGES

 

The previously announced changes to National Insurance regarding the Abolition of Class 2 and the application of National Insurance to Termination Payments are to be delayed by a further 12 months.

 

VALUE ADDED TAX

 

The Treasury is to review the Vat registration threshold, currently £85,000, with a view to reducing it, bringing it more into line with thresholds across the EU.

 

The Chancellor is to make on-line sales portal providers Jointly and Severally Liable for Vat due on sales made by off-shore vendors using their portals. It appears that such vendors have been fraudulently avoiding the payment of VAT to H M Customs on their sales. This technical change could prove significant in future, if its powers are extended into other areas requiring businesses generally to consider whether persons with whom they trade comply with tax legislation. Is this a slippery slope?

 

NON-RESIDENTS

 

Non-residents, including overseas pension schemes, are to be taxed on gains made on the disposal of immovable property in the UK.

 

Non-resident companies owning property in the UK are from April 2020 to become liable to corporation tax on their income and gains rather than income tax.