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Budget 2018 - overview of the announcements

29 October 2018

Whilst there were a couple of references to Brexit, what the Chancellor didn’t say was that all of the numbers we heard were based on the implementation of the Checkers plan. The three primary areas for businesses were the reduction in the corporation tax rate, the increase in the annual investment allowance and the mention of a digital services tax. On the personal tax side there was some tweaking to the entrepreneurs’ relief, plus the threshold for the personal allowances and higher rate band have come in a year early.

Employment tax overview

29 October 2018

The Government has announced reforms to the off-payroll working rules (otherwise known as IR35) in the private sector. From 6 April 2020 medium and large businesses will need to decide whether the off-payroll working rules apply. Where they do, the business, agency, or third-party paying the worker’s intermediary will need to deduct income tax and employee’s NIC, as well as paying employer’s NIC and where applicable the Apprenticeship Levy.

VAT overview

29 October 2018

No doubt Philip Hammond will hope that the only press coverage around VAT focuses on the range of donations to good causes. Many small businesses will note that by freezing the VAT registration threshold until April 2022, the Chancellor has in fact increased expected exchequer revenue in 2021 and 2022, as inflation will bring more organisations into the VAT system. However, it is his measures to stop unfair outcomes that has led to the greatest tax windfall for the Exchequer, with well over £1bn expected to be generated over the next five years across five measures.

Chancellor focusses on technology and IP rich companies

29 October 2018

The government will build on its long term commitment to R&D as outlined in their Industrial Strategy. Alongside a package of investment measures, there were specific changes to the treatment of intangibles – tempered with an anti avoidance measure to ensure that the R&D tax credit regime isn’t subject to abuse.

Tax relief giveaway for trading businesses on capital expenditure

29 October 2018

The big news was the increase in the Annual Invesment Allowance to £1m. This will provide an attractive timing benefit to business undertaking capital expenditure. Other announcements focused on the introduction of a new Structures and Buildings Allowance to provide relief for costs previously outside the scope of capital allowances.

Digital services tax

29 October 2018

The Government targets large multinational digital businesses, introducing from 2020 a tax on UK related revenues. The Government will continue to cooperate with efforts internationally to devise a fairer way of taxing the digital businesses, but this proposal puts a marker down internationally while sending a political signal domestically.

Personal tax property tweaks

29 October 2018

There have been a handful of announcements affecting taxing your home, some good, and some bad. These cover rental, sales, stamp duty and inheritances, but for most people the effects will be very limited.

Entrepreneurs’ Relief changes announced

29 October 2018

The Chancellor has confirmed that Entrepreneurs’ Relief (ER) will be retained at its current level of £10m of lifetime capital gains per individual, but he has made changes to ensure that it is targeted at longer term business investments and genuine entrepreneurs. He has also cracked down on what he has referred to as an “identified abuse” of the current rules.

Chancellor focusses on technology and IP rich companies

29 October 2018

The government will build on its long term commitment to R&D as outlined in their Industrial Strategy. Alongside a package of investment measures, there were specific changes to the treatment of intangibles – tempered with an anti avoidance measure to ensure that the R&D tax credit regime isn’t subject to abuse.

Tax facts - 2019/20
Kevin O'Connor

29 October 2018

Based on Budget 29 October 2018. Find out more information on tax rates.

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