The Chancellor Philip Hammond stood up at the despatch box to deliver what was expected to be the last Budget before Brexit. Due to pessimistic forecasts by the Office of Budget Responsibly, he actually had billions more to play with thanks to better than expected tax collections.
With the “era of austerity finally coming to an end” here’s are our top picks for businesses;
The level of the National Living Wage, currently £7.83 an hour, will increase at a faster rate than the rising cost of living. So the National Living Wage, which is for workers aged 25 and over, will rise to £8.21 an hour in April.
The Conservatives’ manifesto pledge to increase personal allowances to £12,500 and the higher rate threshold to £50,000 will be implemented from April 2019, which is one year earlier than proposed.
Reduction in contribution for smaller firms to the apprenticeship levy from 10% to 5%.
Extension of SDLT exemption for joint first time buyers acquiring a property of up to £500,000. This measure is retrospective and first time buyers in this position could be able to claim a refund.
The VAT registration threshold will be maintained until 2022.
A £1.5bn cash boost into the UK business rates system, with small high street retailers the focus of relief to combat the threats posed by ecommerce and shifting shopping habits.
Annual Investment Allowance
Businesses will now enjoy a higher AIA of £1,000,000 for the two years beginning January 2019, this should encourage capital investment.
The qualifying ownership period has been extended from 12 months to two years. Transitional rules will apply where the claimant’s business ceased before 30 October 2018.
New Enterprise Allowance
The scheme has been extended for would-be entrepreneurs currently on state benefits.
Funding to be extended to 2021, helping 10,000 entrepreneurs
Research and Development
Refunds arising from research and development claims will be restricted to the PAYE paid by the company. This will restrict the benefit of R&D claims by companies that do not have employees.
The new IR35 rules will not be introduced to the private sector until April 2020 – only affecting large and medium sized businesses. This will bring the private sector into line with the current public sectors rules.
Tax Abuse and Insolvency
Following royal assent of Finance Bill 2019/20, directors and other persons involved in tax avoidance, evasion or any act that is deemed unethical will be jointly and severally liable for company tax liabilities, where there is a risk the company may deliberately enter insolvency.
Digital Services Tax
After calls to level the tax playing field between small retailers and online companies, the Chancellor announced a new tax for digital firms with over £500m turnover.
The main residence relief will be restricted. The final qualifying period of ownership will be reduced to nine months.
As usual with any budget, it is always a good idea to check out the detail around consultation and implementation. So go to https://www.gov.uk/government/