Posted by Tax Innovations on 10 Mar 2017
Summary of the Budget 2017
On 8 March 2017, Philip Hammond gave his first Spring Budget as Chancellor. The main tax announcements are set out below.
Major changes or announcements were few and far between, however, there were a few announcements of note for our clients:
It was mixed news for business, with support announced for those hit by increases to business rates; however, most sole traders and company shareholders are to be hit by an increase in tax on their profits from 6 April 2018 through an increase to Class 4 National Insurance and a reduction in the dividend nil-rate band respectively.
Further measures are to be introduced to reduce tax avoidance including tax charges on certain pension transfers to overseas pension schemes and a reduction in the amount of tax-relieved pension savings that can be made once you access your pension pot.
Other tax announcements made in the 2017 Spring Budget include:
- Confirmation of the planned increases to the personal allowance (increasing to £12,500) and the higher rate threshold (increasing to £50,000) by 2020.
- Class 4 National Insurance will see an increase in its main rate from 9% to 10% from 6 April 2018 and 11% from April 2019
- Two new income tax allowances (of £1,000 each) for trading and property income, which will mean that individuals with trading income or property income below the level of the allowance will no longer need to declare or pay tax on that income.
- The previously announced reform of the off-payroll working rules in the public sector will go ahead as planned from April 2017. This reform will move responsibility for operating the rules and paying the correct tax, to the body paying the worker’s company.
- The cash basis for unincorporated business will have its entry threshold increased to £150,000 and its exit threshold increased to £300,000, both from 6 April 2017; it will also be opened to property businesses from the same date.
- Appropriations from fixed assets to stock will no longer be able to turn a capital loss into a trading loss, as is currently the case.
- £435 million of further support for businesses facing significant increases in business rates including support for small businesses losing Small Business Rate Relief to limit increases in their bills to £600 each year, providing local authorities with funding to provide support to individual hard cases in their local area and a £1,000 business rate discount for public houses with a rateable value of up to £100,000.
- From 9 March 2017, transfers to a QROPS that is not within the same country or the EEA, and is not an employer-provided QROPS, will be taxable at 25% of the amount transferred.
VAT and Other Announcements
- From 1 April 2017, the VAT registration threshold is increasing from £83,000 to £85,000 and the deregistration threshold will increase from £81,000 to £83,000
- The proposed change to reduce the SDLT payment deadline to 14 days has been postponed until after April 2018.
- The government has confirmed that they will introduce a new penalty for any person who has enabled another person or business to use a tax avoidance arrangement that is later defeated by HMRC.
If you would like any advice regarding the above article or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or email@example.com.
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