By Louise Misiewicz
BUDGET NOVEMBER 2017
With immediate effect: new announcements• From 22 November 2017, Stamp Duty Land Tax (SDLT) abolished for first time buyers on homes costing up to £300,000; no SDLT on first £300,000 of first time buyer’s purchase of homes up to £500,000.
• From 29 November 2017, Marriage Allowance can be claimed to transfer the benefit of 10% of the personal allowance after the transferring spouse has died.
• For tax year 2017/18, unincorporated property business landlords will have the option to use simpler fixed rate deductions for miles travelled by car, motorcycle or goods vehicle for business journeys.
• From 6 April 2017, anti-avoidance measures will tackle ‘disguised remuneration’ schemes used by closely controlled companies to remunerate employees who have a material interest.
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From 1 January 2018: new announcements• Indexation allowance, which gives companies relief for the effect of inflation on capital gains, will be frozen at January 2018.
• The rate of the Research and Development Expenditure Credit increases from 11% to 12% with effect from 1 January 2018.
From April 2018: new announcements
• Tax-free personal allowance rises from £11,500 to £11,850; threshold for 40% tax rises from £45,000 to £46,350. Rates and bands for Scottish taxpayers are still to be confirmed by the Scottish Parliament.
• Employees will not be charged income tax on benefit of charging an electric car at work.
• Supplement of 3% in calculating taxable employee benefit of a diesel company car will increase to 4%.
• Employees with SAYE-related share option schemes will be able to take a 12-month break from saving, up from 6 months at the moment, while on maternity or paternity leave.
• Abolition of Class 2 National Insurance and reform of Class 4 NIC for self-employed deferred by a year to April 2019 in order to assess impact on contributory benefits.
• Freezing of VAT registration threshold at £85,000 for two years instead of normal £2,000 increase, but speculation about possible reduction in threshold was unfounded.
• ISA investment limit for 2018/19 unchanged at £20,000; Junior ISA limit rises in line with inflation to £4,260.
• Lifetime Allowance for tax-advantaged pension funds rises from £1m to £1,030,000.
• Increase in Enterprise Investment Scheme investment limit from £1m to £2m, provided any amount over £1m is invested in one or more knowledge-intensive companies.
• Capital Gains Tax annual exempt amount rises from £11,300 to £11,700.
• Annual Tax on Enveloped Dwellings to rise by 3% in line with inflation.
From April 2018: confirmation of previous announcements
• ‘Making Tax Digital’ reforms for income tax reporting will not now be introduced until 2020 at the earliest; VAT-registered traders to operate ‘Making Tax Digital for VAT’ from April 2019.
• Class 4 National Insurance Contributions increases proposed in March 2017 will not take effect.
• Dividend Allowance, introduced at £5,000 for tax year 2016/17, reduced to £2,000 for 2018/19.
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By now you would have noticed that the number of tax changes means that you need to plan for the future to ensure that you keep more of what you earn.
Property investors: How does Section 24 (mortgage interest relief) affect you? How are your properties going to perform once Section 24 (mortgage interest relief) comes into full effect?
Doctors/Dentists: Have you incorporated your private practice work into a limited company? Have you structured it to ensure that you and your family takes advantage of the tax breaks?
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Other significant announcements• CGT charge for non-resident taxpayers extended to cover non-residential as well as residential property in the UK with effect from 1 April 2019 (companies) and 6 April 2019 (individuals).
• Allocation of £155m in extra resources to HMRC to fund action on the hidden economy, marketed tax avoidance schemes, enablers of tax fraud, non-compliance and collection of debts 9 months overdue.
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