November 2017 Budget

PERSONAL TAX CHANGES FROM 6 APRIL 2018

  • Personal allowance increased from £11,500 to £11,850
  • Basic rate band (taxed at 20%) increased from £33,500 to £34,500
  • Income over £46,350 to be taxed at 40%
  • Income over £150,000 to be taxed at 45%
  • Dividend allowances to be reduced from £5,000 to £2,000
  • No changes to rates at which dividends in excess of £2,000 allowance to be taxed
    • Basic rate 7.5%
    • Higher rate 32.5%
    • Additional rate 38.1%
  • Class 1 NIC paid by employees and employers on earnings over £8,424 per year (£702 per month)
  • Class 2 NIC paid by self-employed to increase to £2.95 per week – abolition postponed until April 2019
  • Class 4 NIC paid by self-employed to remain at same rates so earnings between £8,425 and £45,000 to be taxed at 9% (2% for profits over £45,000)
  • Capital gains tax annual exemption to increase to £11,700 but no changes to the rates of tax
  • ISA limits steady at £20,000 with juniors ISAs and child trust funds uprated to £4,260
  • Additional £3.65 per week for basic state pension

PENSIONS

  • Lifetime allowance increased to £1,030,000
  • Annual allowance remains unchanged at £40,000

BUSINESS TAX CHANGES FROM 1 APRIL 2018

  • VAT threshold to remain at £85,000
  • VAT Consultation in 2018
  • Corporation tax to remain at 19%
  • Diesel supplement on company cars to be increased from 3% to 4% which will increase the benefit-in-kind value of cars and fuel (where company provides private fuel)
  • Multiplier used for car fuel benefit charge to increase from £22,600 to £23,400
  • Van flat rate charge will increase to £3,350 with flat-rate fuel benefit charge increasing to £633
  • National Living Wage (age 25+) to increase from £7.50 to £7.83 per hour
  • National Minimum Wage hourly rates to increase to:
    • Apprentices: £3.70
    • 16 & 17 year olds: £4.20
    • 18-20 year olds: £5.90
    • 21-24 year olds: £7.38

PROPERTY TAXES

  • First time buyers exempt from Stamp Duty Land Tax on the first £300,000 of any property with a cost of up to £500,000 – effective 22 November 2017
  • Business rates property valuations to use the Consumer Prices Index rather than the Retail Prices Index

WHAT TO LOOK OUT FOR NEXT YEAR

HMRC will undertake the following consultations in 2018:

  • Review of the design of the VAT threshold + simplification of VAT legislation
  • Employment status tests for employment rights and tax treatment
  • Extension to private sector of changes to application of IR35 introduced into public sector in April 2017
  • Points-based model for late submission penalties
  • Penalties and interest due on late payments and repayments plus overall review of the system as a whole
  • Taxation of trusts
About the Author
Carolyn Burchell trained with the UK’s top firm of accountants, qualifying as a Chartered Accountant in 1996. Carolyn moved into industry in 1997 working on a number of commercial projects and managing Treasury and Credit functions before taking a career break to have a family. In 2009, Carolyn decided to enter into the stringent Chartered Institute of Taxation examination programme, qualifying as a Chartered Tax Adviser in 2012.

Leave a Reply

*

Contact Us