As we anticipated, there were not a lot of ‘new’ announcements in today’s Budget. However, here is a quick run-down of the highlights (including some previously announced items):
- Corporation tax is due to be reduced to 19% this April and to 17% in April 2020.
- Research and Development tax credits will be reformed to reduce the amount of administration businesses face to claim them.
- The Government will consult on whether Business Rates should be reformed to avoid dramatic increases for businesses. Specific help will be available to businesses this year who are facing significant increases in their rates bill (including a £1,000 discount for 90% of public houses).
- The tax-free personal allowance will increase to £11,500 this April and will increase to £12,500 by 2020.
- The higher rate threshold for income tax (when the 40% rate starts) will increase to £45,000 this April and to £50,000 by 2020.
- National Insurance rates for the self-employed will increase from 9% to 10% in 2018 and to 11% in 2019.
- The dividend allowance (the amount of dividends an individual can receive before having to pay tax on them) will be reduced from £5,000 to £2,000 in 2018.
Avoidance, evasion and ‘unfairness’
- The Chancellor continues to target those who use avoidance schemes (and those who promote and implement them) and will introduce new measures to be able to levy penalties on people who enable individuals and businesses to avoid tax.
- The Government will consult on the ‘fairness’ of the tax system for self-employed and employed individuals, and those who operate their businesses through companies to determine whether the tax burden on each of them should be levelled. The National Insurance and dividend allowance changes (above) are two steps in this process.
There will be yet another Budget in the Autumn this year which may contain the result of consultations announced today, plus, no doubt, new measures to prepare the UK for the consequences of Brexit.
If you have any questions on any of this, or any other announcement you may have seen in the press, please contact a member of the Tax department.