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Autumn Budget Summary

 

Posted on 23 November 2017

Yesterday afternoon, Chancellor Philip Hammond announced the Autumn Budget 2017, purporting to introduce new measures that ensure a low-tax, fair economy for both working individuals and businesses. Here, we summarise the main points.

  • In 2018-19, the Personal Allowance and Higher Rate Threshold will increase further, to £11,850 and £46,350 respectively.
  • From April 2018, there will be no benefit in kind charge on electricity that employers provide to charge employees’ electric vehicles.
  • The 30-day payment window for Capital Gains Tax will be deferred until April 2020.
  • The band of savings income that is subject to the 0% starting rate will be kept at its current level of £5,000 for 2018-19.
  • The ISA annual subscription limit for 2018-19 will remain unchanged at £20,000.
  • The limit for Junior ISAs and Child Trust Funds will be uprated in line with CPR to £4,260.
  • The lifetime allowance for pension savings will increase to £1,030,000 for 2018-19.
  • The R&D expenditure credit will increase from 11% to 12% for larger companies.
  • From 1 April 2018, the planned switch in indexation for property tax will change from RPI to CPI.
  • The £1,000 business rate discount for public houses with a rateable value of up to £100,000 will continue.
  • Revaluations of non-domestic properties will move to every three years following the next revaluation, currently due in 2022.
  • All gains on non-resident disposals of UK property will be brought within the scope of UK tax.
  • Corporate indexation allowance capital gains will be frozen from 1 January 2018.
  • From April 2020, income that non-resident companies receive from UK property will be chargeable to corporation tax rather than income tax.
  • From April 2019, withholding tax obligations will be extended to royalty payments, and payments for certain other rights, made to low or no tax jurisdictions in connection with sales to UK customers.
  • The government will amend the Substantial Shareholding Exemption legislation and the Share Reconstruction rules to avoid unintended chargeable gains being triggered.
  • Tax rules which apply to arrangements involving hybrid structures and instruments will be amended to clarify how and when the rules apply.
  • VAT registration threshold will remain at the current level of £85,000 for two years from April 2018.
  • Further steps taken in the Budget to tackle tax evasion, avoidance, and compliance are forecast to raise £4.8 billion between now and 2022-23.
  • Offshore tax time limits for non-deliberate offshore tax non-compliance assessments will be extended so that HMRC can always assess at least 12 years of back taxes.
  • The government will introduce a VAT domestic reverse charge to prevent VAT losses.
  • HMRC will require upfront security from employers with a history of avoiding paying NICs. This will take effect from 2018 and raise up to £15 million a year.
  • The Intangible Fixed Asset rules will be updated with immediate effect, so that a licence between a company and a related party in respect of intellectual property is subject to the market value rule.
  • The government will remove the 6-year time limit within which companies must adjust for transactions that have reduced the value of shares being disposed of in a group company.
  • The government will remove transitional commencement provisions immediately.
  • A restriction will be introduced immediately to the relief for foreign tax incurred by an overseas branch of a company, where the company has already received relief overseas for the losses of the branch against profits other than those of the branch.
  • The government will legislate in Finance Bill 2017-18 to extend HMRC’s powers to hold online marketplaces Jointly and Severally Liable (JSL) for the unpaid VAT of overseas traders on their platforms to include all (including UK) traders.
  • Online VAT fraud will be tackled by extending powers on overseas businesses, ensuring VAT numbers are displayed, introducing a split payment model and encouraging compliance by users of digital platforms.
  • No business will be mandated to use MTD until April 2019. Only those with turnover above the VAT threshold will be mandated at that point, and then only for VAT obligations. The scope of MTD will not be widened before the system has been shown to work well, and not before April 2020 at the earliest.
  • The government will reform the penalty system for late or missing tax returns, adopting a new points-based approach. It will also consult on whether to simplify and harmonise penalties.
  • The government will close the Certificate of Tax Deposit scheme for new certificates on and after 23 November 2017. HMRC will use new technology to recover additional Self-Assessment debts in closer to real-time by adjusting the tax codes of individuals with Pay As You Earn (PAYE) income.
  • The government will expand existing security deposit legislation to corporation tax and Construction Industry Scheme deductions.  

 

Full details of the Autumn Budget will be available on our website in the next few days.

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