This was a Budget announcement where what was omitted from the speech was at least as interesting as what was mentioned, perhaps more so.
I was surprised not to hear more around Brexit and pensions, for example.
Again the Chancellor brought some humour into the normally dry announcements and the Prime Minister thoughtfully provided him with a packet of strepsils to ensure his voice didn’t give out.
The full 88 page PDF of the Autumn Budget is available here, divided up by economy and public finances, policy decisions, tax, productivity, housing, and public services.
The chart on page 5 shows public sector current receipts, these are the top 5 discrete areas:
1. Income tax £185bn
2. VAT £145bn
3. National Insurance contributions £134bn
4. Corporation tax £55bn
5. Excise duties £49bn
Other taxes come in at £86bn and other non-taxes at £51bn.
Britain – a beacon of creativity
Chancellor Philip Hammond declared, “The economy is set on a path to a new future outside the EU – full of change, challenges and new opportunities.
“Global Britain will be a prosperous economy where everyone has the opportunity to shine & talent & hard work are rewarded, Britain is a beacon of creativity, a civilised and tolerant place, an outward looking, free trading nation – a force for good in the world.”
Measures of particular interest
If you’d like the summary below as a downloadable PDF, click here.
In terms of specific measures, those we particularly recommend looking at are:
1.Pensions and savings: Here there was little change. The 0% band for savings income remains at £5,000 for 2018/19; ISA limits remain unchanged at £20,000 whilst it rises slightly for Junior ISAs and Child Trust Funds to £4,260. The lifetime allowance for pensions increases in line with CPI to £1,030,000 for 2018/19.
2. Personal allowance: The personal allowance is increasing to £11,850 and Higher Rate Tax threshold to £46,350 for 2018/19. There’s a pledge to further increases, to get to £12,500 for personal allowance and £50,000 for the Higher Rate Threshold by 2020.
3. VAT: The possible reduction in starting rate for the VAT threshold did not happen. It remains at £85,000 for the next two years but with a consultation on whether it could be ‘designed to better incentivise growth’ and a reference to Germany’s starting rate for VAT at £15,000. A warning shot across the bows, perhaps.
4. Possible reforms to workers tax: The government is looking at replicating the success of the IR35 ‘off-payroll working rules’ by extending anti-avoidance legislation to the private sector. This could mean that individuals using personal service companies while working in a similar manner to an employee would likely be taxed as employees in the future. Consultation is underway and due to be published in 2018.
5. National Insurance: No mention of increasing NI for self-employed workers, the proposed increase to 10% has been dropped.
6. Investment tax reliefs: The Treasury have confirmed their support of Investment tax reliefs such as VCT, EIS and SEIS, but will review the existing legislation to ensure these are targeted at high-risk business investments.
7. Tax avoidance measures: The strong line on tax avoidance and evasion continues with investment in new technology to further tackle it. Also signals that online sellers who’ve hit the headlines for paying very little tax in the UK and that perpetrators of online VAT fraud are being targeted in a bid to raise additional funds, with online marketplaces as well as their sellers being held jointly responsible for VAT going forwards.
8. Making Tax Digital (MTD): Confirmation on the deadlines for making tax digital (MTD) with time allowed in the schedule expressly for ensuring the system is working before it is rolled out more widely. So from April 2019 only businesses with turnover above the VAT threshold will be mandated and initially only for VAT. It won’t be rolled out more widely until April 2020 at the earliest.
Plus for locals or people making trips to or from Wales regularly…
Severn Bridge toll: Confirmation that the Severn Bridge tolls will be abolished at the end of 2018 and reduced from January 2018.
If you’d like to discuss how this might relate to your situation, call us on 01761 241 861 or email us today. We will be pleased to advise you or to invite you into our offices in Paulton, near Bristol and Bath, for a consultation.