Budget Summary Autumn 2017
Mr Hammond will probably be pleased if commentators decide that his Autumn Budget was a steady-as-she-goes, broadly modest Budget. After the national insurance u-turn he was forced to make after his March Budget this year, that was probably his aim.
In any case, for a variety of economic and political reasons, the Chancellor announced a relatively modest net tax giveaway of just under £1.6 billion for the coming tax year.
His main attention-seeking move was to give first time buyers an exemption from stamp duty land tax on the first £300,000 of value for properties worth up to £500,000. Rumours – probably from the Treasury itself – had trailed changes along these lines, and the new relief represents more than a third of his net giveaway.
With income tax, the changes were much less dramatic – increasing both the personal allowance and the higher rate threshold by 3% – the standard inflation-linked increase. ISA investors saw their main ISA and lifetime ISA investment limits frozen and only children saw a small increase in their specialist ISAs. There was better news for pension savers who enjoyed a £30,000 increase in the lifetime allowance and thankfully no cuts to the annual allowance.
There were rumours in advance of the Budget about the possibility of reducing the VAT threshold nearer to German levels – which are much lower than the UK’s £85,000 registration limit. In the event the Chancellor just froze the threshold for the next two years. But he has said that he will consult on the ‘design’ of this threshold.
Several measures were designed to introduce much more of a focus on risk investment for venture capital trusts, enterprise investment schemes and seed enterprise investment schemes.
The Chancellor announced a number of consultations about future policy. One of the most important concerned the possible extension to the private sector of the stricter IR35 rules that apply in the public sector for personal service companies. This could clearly have important implications for contractors in many industries.
2018 will see a major consultation on the taxation of trusts. The aim will be to make the tax regime ‘simpler, fairer and more transparent’. We shall see!
Other consultation papers will be produced on tax evasion and avoidance – especially with regard to offshore issues. One strong possibility is that HMRC will be able to assess at least 12 years back taxes without having to establish deliberate non-compliance. Another proposed innovation is a points-based penalty system for late or missing tax returns.
If there are any issues in this Budget that you would like to discuss in more detail, or if there is anything we can help you with, do get in touch. We will be pleased to hear from you.