Marshall Smalley 2018 Autumn Budget Overview

Marshall Smalley 2018 Autumn Budget Overview

The Chancellor delivered what is for now supposed to be our annual Budget on 29 October 2018, without making big increases in taxes spending pledges were funded and a planned increase in income tax allowances was accelerated.

 

This is our summary of these measures and previously announced changes too.

PERSONAL TAXES

Income tax: The personal allowance, the amount everybody can earn each year without paying income tax, will rise to £12,500 in 2019-20.

No changes to income tax rates were announced.

The threshold for higher-rate tax will increase from £46,350 to £50,000 in April next year too.

The above changes were accelerated to take affect from April 2019 one year earlier than originally planned.

Capital Gains Tax:  The capital gains tax annual exemption increases from £11,700 to £12,000 in 2019-20. No changes to capital gains tax rates were announced.

Savings:  The annual amount you can save into an Individual Savings Account (ISA) remains at £20,000 from April 2019.

BUSINESS TAXES

Self Employed: From April 2019 the tax-free dividend allowance for shareholders remains at £2,000, investors continue to have an advantage over the self employed as their shares can be held in ISAs.

From April 2019, the main rate of Class 4 NICs remains at 9%.

Corporation Tax: As previously announced the main rate of corporation tax is 19% from 2019 and set to drop to 17% in 2020.

Capital Allowances: The annual investment allowance attracting a 100% tax deduction for qualifying expenditure between 1 January 2019 and 31 December 2020 increases significantly to £1m temporarily from £200k.

IR35: Public Sector off-payroll anti-avoidance rules are to be extended to the private sector from April 2020 with a planned exemption for smaller businesses. Clarification of the exemption and how long that will last are yet to be established.

Landlords: From April 2020 the letting relief available for buy to lets will be restricted so it only applies were the landlord was in shared occupation of the property. In a related move the final period principal private residence exemption reduces from 18 to 9 months.

Employment allowance: from 6 April 2019 some employers continue to be able to offset up to £3,000 each tax year against Class 1 NICs.

VAT

Registration and de-registration thresholds: the VAT rates, the registration threshold of £85,000 and the de-registration threshold to £83,000 all remain unchanged.

If you would like any advice on how these changes will impact on your business then please do get in touch by calling 0115 956 9452 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

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