Avanti Spring 2017 Budget Update!
Avanti – Proactive Accountants & Tax Advisers. Keeping you up to date as it happens.
Following the Spring Budget the Chancellor has faced an unprecedented backlash from his MPs who have accused him of breaking the General Election manifesto commitment not to raise VAT, Income Tax or….National Insurance. The Chancellor has stated in a letter to Conservative MPs today:
“It is very important both to me and to the Prime Minister that we are compliant not just with the letter, but also the spirit of the commitments that were made. “In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measure set out in the Budget.”
Philip Hammond’s last Spring Budget. From this Autumn the Budget will be in the Autumn and the Statement in the Spring. So this year, two Budgets!
BUSINESS
Making Tax Digital
• The introduction of MTD (Making Tax Digital) will be delayed by one year for those businesses with a turnover below the VAT threshold.
Corporation Tax
• Corporation tax will fall in April 2017 to 19%, with an eventual drop to 17% by 2020
Business Rates
• Business Rate receive a cap so that no rises will be more than £50 per month for those exiting the Business Rates Relief
• Public Houses will get a £1,000 discount on Business Rates of less than £100,000 rateable value.
• A further £300M for discretionary relief
VAT
Value Added Tax (VAT): Registration and deregistration thresholds:
• From 1 April 2017 the VAT registration threshold will increase from £83,000 to £85,000
• and the deregistration threshold from £81,000 to £83,000.
Employee Benefits
• The only employee benefits that won’t be taxed in full after April are pensions, childcare and the cycle to work scheme
Self-Employed
• There will be an investigation by Matthew Taylor into the tax differences between self-employed and employed workers
Dividend Allowances
• A further strike at the owner manager SME companies is seen by a reduction from April 2018 in the Dividend Allowance form £5,000 to £2,000
Research and Development
• There will be less administration surrounding the claims to R&D tax credits
Tax Avoidance
• A further £820M of measures was announced, including VAT on roaming telecommunications outside the EU and a penalty for professionals whose scheme are defeated by HMR&C
Tax Simplification
• Increase the cash basis entry threshold to £150,000, and exit threshold to £300,000,
• and will extend the use of the cash basis to unincorporated landlords.
• Simplify the rules on capital and revenue expenditure within the cash basis, to make it easier for businesses to work out whether their expenditure is deductible for tax.
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PERSONAL
National Living Wage
• NLW will increase to £7.50 per hour in April
Tax Allowances
• Increases to £11,500 for basic rate taxpayers and £45,000 for higher rate taxpayers
• Personal tax allowance to rise to £12,500 by 2020 as planned
Savers
• NS&I bond – will pay 2.2% on 3 years available from April 2017 for savings up to £3,000
• ISA – savers will be able to put even more away tax free – up to £20,000 a year from April.
Women’s Issues
• A £20M fund to combat violence against girls
• £5M to help women back into work following a break from work for caring
• £5M for projects to celebrate women getting the right to vote in 1918.
Childcare
• Two million households will be eligible for free childcare by the end if the year
• Working parents with 3 & 4 year old children will receive double their entitlement to 30 hours per week from September
• Tax-free childcare will begin next month. So for every 80p you pay in child care, the government will add another 20p – up to £10,000 of spending.
The scheme is available for children up to the age of 12,
• and the tax relief is doubled for children with disabilities.
Training in Science and Technology
• £300M for 1,000 new PhD placements
• £270M for technologies such as reobotics and driverless vehicles, so called Disruptive Technology
• £16M for a 5G mobile technical hub
Education
• £320M for 110 new free schools
• Free school transport extended to children on free school meals at selective schools
Careers
• Introduction of new T-Levels qualification relating to technology
• £40M for projects piloting the study of lifelong learning
DUTIES
• Sugar tax set at 18 and 24 pence per litre.
• Freezing vehicle excise duty for hauliers and HGV.
• New minimum excise duty on cigarettes.
• No changes on duties on alcohol and tobacco.
GENERAL
Local Government
• Midlands Engine Strategy to be published this year
• £690M competition for local authorities to tackle urban congestion
Devolved Governments
• £350M for Scottish Government
• £200M for Welsh Government
• £120M for Northern Ireland executive
Social Care
• £2BN over the next three years for England
• Green paper to be published on funding later this year
N.H.S
• £325M of capital for projects
• £100M for 100 onsite GP treatment units in A&E
Growth
• The forecasts of 2% growth for 2017 is up from 1.4%
• 2018 1.6%
• 2019 1.7%
• 2020 1.9%
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KEY POINTS
• UK growth up this year
• Increase in taxes for the self-employed
• Tax free dividend allowance drops from £5,000 to £2,000 from April 2018
• Measures for business rates amount to a £435m cut, including a £1,000 cut for 90pc of pubs
• £2bn for social care, and £100m for new triage programmes at English hospitals next winter
• Funding for a further 110 new free schools on top of the existing 500, including new specialist maths schools
If you would like further advice and guidance on any of the above matters to help you and your business move forward, please do contact us on enquiries@avantigroup.uk.com or call 01473 558866 for ‘modern accountancy with traditional values’, providing a truly proactive service.
This information does not constitute any form of financial or investment advice. Past performance is no guarantee of future investment returns and you should be aware that the value of your investments can go down as well as up. We believe the information contained to be correct at the time of going to press, but we cannot accept any responsibility for any loss occasioned to any person as a result of action or refraining from action as a result of any item herein.