Our most experienced accountant put together this quick breakdown a few hours after the Chancellor gave his Budget speech. We thought it might be useful to you too!
Having listened to the Budget and briefly reviewed the Press Releases, I thought it would be useful to let everyone know of some of the changes that might be relevant to you and/or our clients.
1. Income tax allowances and bands – Increases from April 2017 - Personal Allowance up to £11,500 and 40% tax band threshold up to £45,000.
2. Capital gains tax rates decreasing to 20% (was 28%) for taxpayers in 40/45% tax bands and 10% (was 18%) in basic rate tax band.
3. Class 2 National Insurance to be abolished from 2018.
4. Loans to participators- tax payable by the company to increase to 32.5% (from 25%) for loans advanced from 6 April 2016 onwards.
5. Corporation tax rate, which had already been announced as falling to 18% by 2020, will fall to 17% in 2020.
6. Increase in small businesses rates relief.
7. Stamp duty on commercial property to change to 0% up to £150k, 2% on next £100k and then 5% above £250k – it is to be banded so these rates apply to the bans of consideration not on total consideration as before, from today.
8. Entrepreneurs’ capital gains tax relief to be extended to an investor relief for external investors who acquire new shares in unlisted companies, issued after 17/3/2016 and held for 3 years.
9. Increases in car and van benefits in kind up to 2019, including on zero emissions vehicles.
10. ISA Annual limit increasing to £20,000
11. For those of you aged between 18 and 40, you can invest in a Lifetime ISA, whereby you can invest up to £4,000 per annum and get a 25% government bonus added, but unfortunately it can only be used to buy a first home or withdrawn when you are 60. If it is withdrawn early the government bonus, the interest on it and a 5% charge are payable.
12. People with trading and property income of < £1,000 will get a tax free allowance for each of these sources of £1,000 from April 2017 and those with more income could deduct £1,000 instead of exact expenses.
13. Soft drinks industry levy – there is very little detail on this and the only thing I have found is the following extract:
‘2.157 Soft drinks industry levy – The government will introduce a new soft drinks industry levy to be paid by producers and importers of soft drinks that contain added sugar. The levy will be charged on volumes according to total sugar content, with a main rate charge for drink above 5 grams of sugar per 100 millilitres and a higher rate for drinks with more than 8 grams of sugar per 100 millilitres. There will be an exclusion for small operators, and we will consult on the details over the summer, for legislation in Finance Bill 2017 and implementation from April 2018 onwards. (Finance Bill 2017)’
I hope you find this useful and if you have any queries, please ask me. There are quite a lot of smaller or less relevant to us changes, so I can also help if you have heard of anything else that might be of interest.