Personal taxation and wages
The tax-free personal allowance will be increased to £11,850 from April 2018. The basic rate band will increase £34,500 at the same time. Therefore an individual can earn up to £46,350 before paying the higher rate income tax.
The National Living Wage will increase by 4.4%, from £7.50 an hour to £7.83.
Property taxes
For first-time buyers purchasing properties worth up to £300,000, Stamp duty is to be abolished with immediate effect.
A 100% council tax premium is to be levied on empty properties.
Capital Allowances
The list of energy saving technologies that qualify for 100% first year allowances has been updated.
Evaporative air coolers, saturated steam to electricity conversions and white LED lighting modules are added to the list, while localised rapid steam generators and biomass fired warm air heaters are removed.
Anti-avoidance
The Government continues to strengthen its measures to counter the use of disguised remuneration (“DR”) schemes. The new measures introduce a requirement for individuals to provide information to HMRC about loans received from DR schemes. This will enable HMRC to enforce the application of the 2019 loan charge. This applies a tax charge on all outstanding loans from DR schemes.
They also confirm that the DR rules in Part 7A of ITEPA apply even in cases where a contribution to a DR scheme should have previously been taxed as employment income.
Further details of these measures will be published shortly.
VAT
The compulsory VAT registration threshold will remain at £85,000 for the next two years.
The scope of the existing joint and several liability provisions applying to online marketplaces will be extended.
Knowledge development
The rate of Research and Development Expenditure Credit will increase from 11% to 12%. The Government believes that providing more support in the form of R&D tax credits will incentivise businesses to carry out more R&D work in innovative industries.
The individual investment limit for individuals under the Enterprise Investment Scheme (“EIS”) has been doubled to £2m, provided that any amount over £1m is invested in knowledge intensive companies.
The annual investment limit for knowledge-intensive companies raising EIS or VCT finance will increase to £10m.
Vehicle excise duty
Vehicle excise duty for diesel cars that do not meet the latest standards is to rise by one band in April 2018. The tax hike will not apply to van owners. The existing diesel supplement in company car tax is to rise by 1%.
and finally…
We’ll be scrutinising the initial announcements once more detail is released in the coming weeks and will do our best to keep you up-to-date on any specific challenges or opportunities.
In the meantime do get in touch if you’d like to discuss how we can support you with any tax issues.
