It was a largely unexciting autumn budget delivered last month by the British Chancellor, Philip Hammond.
He was under a great amount of pressure, given that he has very little wriggle room, and had to deliver the news of an ailing economy, without highlighting the main cause – uncertainty over Brexit.
There were various issues highlighted, including low productivity and a continuing increase in the national debt to help fund the public sector. Until the economy improves greatly, this will continue to be to the case. It would take a very brave, or even foolhardy chancellor, to cut funding to the public sector further (given pressures in the NHS, etc).
However, there were a few key items in the budget:
First time buyers of residential property outside Scotland will pay no stamp duty land tax on the first £300,000 of the purchase price for a home, provided its value does not exceed £500,000.The personal allowance will rise to £11,850, and the higher rate tax threshold for the UK (excluding non-savings, non-dividend income in Scotland) will rise to £46,350 for 2018/2019.The pension lifetime allowance will be increased from £1m to £1.03m from April 2018. There will be no change to the annual allowance.The diesel supplement for company cars will be increased from 3% to 4% from April 2018.There will be several changes to business rates, notably dealing with the “staircase tax” and introducing valuations every three years.Looking in some more detail at these announcements, the potential tax saving for first time buyers works out at up to £5,000.
The increase in personal allowance is 3% which matches inflation. This is welcome but not a major giveaway by the chancellor as it only matches inflation.
I was expecting an attack on the dividend allowance and tax rates – I believe this has been delayed to improve the Tories’ popularity if there was a snap election. From what I hear, the possibility of higher tax rates on dividends has just been delayed, not dismissed entirely.
Finally, the issue of IR 35, which is tax legislation designed to combat tax avoidance where workers supply their services to clients via an intermediary, such as a limited company, but would be an employee if they were providing their services directly.
Whether people are directly employed or self-employed is currently determined (in the private sector) by the consultant or contractor themselves.
However, new rules within the public sector came in April 2017, and the government has confirmed that it is to consult in 2018 on extending this to the private sector.
It would mean instead that the private sector organisation that takes on a consultant/contractor would have to determine if they are an employee or self-employed. If you are a farmer with a regular helper, you will have to decide for them if they are an employee or self-employed. If they are an employee, then they must go through your payroll.
For more information on the budget, visit www.MCAaccountants.com.
Please note the advice given above is very general and cannot not be relied upon as each individual business case would need to be assessed. MCA Chartered Accountants cannot accept responsibility for decisions based upon this article.
It was a largely unexciting autumn budget delivered last month by the British Chancellor, Philip Hammond.
He was under a great amount of pressure, given that he has very little wriggle room, and had to deliver the news of an ailing economy, without highlighting the main cause – uncertainty over Brexit.
There were various issues highlighted, including low productivity and a continuing increase in the national debt to help fund the public sector. Until the economy improves greatly, this will continue to be to the case. It would take a very brave, or even foolhardy chancellor, to cut funding to the public sector further (given pressures in the NHS, etc).
However, there were a few key items in the budget:
First time buyers of residential property outside Scotland will pay no stamp duty land tax on the first £300,000 of the purchase price for a home, provided its value does not exceed £500,000.The personal allowance will rise to £11,850, and the higher rate tax threshold for the UK (excluding non-savings, non-dividend income in Scotland) will rise to £46,350 for 2018/2019.The pension lifetime allowance will be increased from £1m to £1.03m from April 2018. There will be no change to the annual allowance.The diesel supplement for company cars will be increased from 3% to 4% from April 2018.There will be several changes to business rates, notably dealing with the “staircase tax” and introducing valuations every three years.Looking in some more detail at these announcements, the potential tax saving for first time buyers works out at up to £5,000.
The increase in personal allowance is 3% which matches inflation. This is welcome but not a major giveaway by the chancellor as it only matches inflation.
I was expecting an attack on the dividend allowance and tax rates – I believe this has been delayed to improve the Tories’ popularity if there was a snap election. From what I hear, the possibility of higher tax rates on dividends has just been delayed, not dismissed entirely.
Finally, the issue of IR 35, which is tax legislation designed to combat tax avoidance where workers supply their services to clients via an intermediary, such as a limited company, but would be an employee if they were providing their services directly.
Whether people are directly employed or self-employed is currently determined (in the private sector) by the consultant or contractor themselves.
However, new rules within the public sector came in April 2017, and the government has confirmed that it is to consult in 2018 on extending this to the private sector.
It would mean instead that the private sector organisation that takes on a consultant/contractor would have to determine if they are an employee or self-employed. If you are a farmer with a regular helper, you will have to decide for them if they are an employee or self-employed. If they are an employee, then they must go through your payroll.
For more information on the budget, visit www.MCAaccountants.com.
Please note the advice given above is very general and cannot not be relied upon as each individual business case would need to be assessed. MCA Chartered Accountants cannot accept responsibility for decisions based upon this article. 
This is a subscriber-only article
SHARING OPTIONS: