TT264: 2017 Autumn Budget
When the Chancellor began his Budget speech by stating that the 2017 Autumn Budget was about “more than just Brexit” he meant exactly that, with the only announcement directly relating to Brexit being an additional £3 billion of funding in preparation for leaving the EU. Instead the emphasis was largely on making Britain “fit for the future”. Measures were introduced to promote technological advancement such as investing in electric (and even self-driving!) cars and infrastructure, increased funding for maths and computer science teachers and providing tax incentives for technology focused start-up companies and those engaged in Research & Development.
The other area sharing the spotlight was the housing market, with the revelation on changes to SDLT for first time buyers undoubtedly causing the most uproar in the House of Commons. Other announcements aimed at addressing the housing shortage included a proposed 100% council tax premium on properties left empty, the unveiling of plans for five new “garden towns” and a pledge of £44 billion of investment over the next 5 years to boost skills in the construction industry and to provide resources and land for development. Mr Hammond also ordered an urgent review into the discrepancy between residential planning applications and the number of developments which actually go ahead, the outcome of which is to be reviewed ahead of the 2018 Budget.
While Mr Hammond tried to maintain a positive spin throughout (a number of jokes being thrown in for good measure at the expense of the Prime Minister, Lewis Hamilton and Jeremy Clarkson) yet more gloomy news was delivered on the state of the economy. It was revealed that the OBR estimates on GDP had been revised down with the economy forecast to slow over the next three years. Business investment and productivity growth were also revised down. The Chancellor’s response to this was to aim to encourage people into “well paid, good quality work” by increasing the National Living Wage and focusing on training and apprenticeships. He also set out to aid small businesses by bringing forward the alignment of business rates with CPI inflation by two years to April 2018.
The key tax announcements from the Autumn 2017 Budget are summarised as follows:
- The personal allowance will increase to £11,850 from April 2018.
- For the majority of the UK, the higher rate tax threshold will increase to £46,350 in April 2018. It is not yet known whether the SNP will make any changes to the tax thresholds in Scotland.
- From today, first time buyers will be exempt from SDLT when purchasing a property worth up to £300,000.
- In London and other expensive areas, the fist £300,000 of the purchase price for first-time buyers will be exempt for properties costing up to £500,000.
- Indexation allowance for companies is to be frozen from 1 April 2018, meaning that the allowable base cost for chargeable disposals made by companies will only be adjusted for inflation up to this date.
- The compulsory VAT registration threshold is to remain frozen at £85,000 for the next two years.
- The R&D tax credit is to be increased to 12%.
- For knowledge intensive companies, the EIS investment limit is to be doubled from £1m to £2m.
- The 1% diesel supplement when calculating a company car benefit in kind is to increase by a further 1%.
- There are plans to charge income tax on royalties paid to low tax jurisdictions in respect of UK sales.
- The scheduled rise in fuel duty for petrol and diesel has been scrapped.
- Alcohol duty for beer, wine, spirits and most ciders (not high-strength white ciders) is to remain frozen (for those of you who are Whisky drinkers, apparently reducing the cost of a bottle by £1.15 from April!).
Further details can be found in our budget summary.Talk to Barnes Roffe today