2018's Autumn Budget has introduced a number of key changes that will affect individuals and businesses across the UK.
Here are our top takeaways from Phillip Hammond's speech:
1. Personal allowance for UK taxpayers increased to £12,500 from April 2019 – a year earlier than previously promised. Higher rate threshold increased to £50,000 from April 2019 giving a basic rate band of £37,500. The scale of this increase is unlikely to apply in Scotland – rates and thresholds will be announced in the Scottish Budget on 12 December.
2. Capital allowances - annual investment allowance increased from £250,000 to £1m for the next two years – giving additional tax relief for businesses investing in plant and machinery. In addition there is to be a new 2% relief for construction or purchase of new commercial and industrial buildings.
3. Entrepreneurs’ Relief – qualifying holding period extended to two years from April 2019 and anti-avoidance measures to limit relief where shares do not have full economic rights take effect from tonight.
4. IR35 to be applied to large and medium-sized business in the private sector from 2020, making private sector clients responsible for determining whether the IR35 rules apply to contractors supplying services through personal service companies and for deducting income tax and NICs from payments where it does apply.
5. Digital Businesses – a new digital services tax of 2% of UK-related turnover (aka the FAANGs tax (Facebook, Apple, Amazon, Netflix & Google)) for businesses with over £500m global revenue, to be introduced from 2020, subject to consultation.
6. Excise and fuel duties - fuel duty, and duty on spirits, beer and cider are being frozen.
7. Capital Gains Tax Private Residence Relief – small restrictions to be made on CGT principal private residence relief so that, where property is let, the owner must be in residence. The automatic qualification period will be reduced to nine months.
8. Plastic tax – a new tax on imported or manufactured plastics which are less than 30% recyclable. No tax on disposable cups – yet.
9. IP rich businesses – new tax relief for acquisition of IP rich businesses to be consulted on, and changes to the taxation of intangibles will take effect from Wednesday 7 November.
10. Liquidations - HMRC is to be made a preferred creditor in liquidations.