If the chancellor was asked to produce a Budget that would not rock the political boat, then it looks as if that is what he has delivered. The total net cost of his policy decisions for 2018/19 was a little over £6 billion with just £1.585 billion attributable to tax policy decisions.
Wells Gibson believes the following tax changes are likely to be most relevant to our clients and/or their families:
- The income tax personal allowance will rise to £11,850 and the higher rate tax threshold for the UK (excluding non-savings, non-dividend income in Scotland) will rise to £46,350 for 2018/19;
- The pension lifetime allowance will be increased from £1 million to £1.03 million from April 2018. There will be no change to the annual allowance;
- The ISA limit will be frozen at £20,000 and the LISA limit at £4,000, but the junior ISA and child trust funds will rise to £4,260 from April 2018; and
- The government will also consult on reforming the taxation of trusts.
Other tax changes announced include:
- First time buyers (outside Scotland) will pay no stamp duty land tax on the first £300,000 of the purchase price for a home provided its value does not exceed £500,000. Gains on disposals of all UK property (including commercial property) will be subject to UK tax on gains by non-UK residents accruing from April 2019.
- Relief for venture capital trusts, enterprise investment schemes and seed enterprise investment schemes will be focused on companies where there is a real investment risk. Many other provisions will tighten up the rules for these investments.
The following tax changes will be of more interest to business owners:
- The VAT registration threshold will be frozen at £85,000 for 2018/19 and 2019/20.
- The corporate indexation allowance will be frozen from January 2018, so that companies will no longer benefit from relief for inflation after this date on their capital gains.
- Online marketplaces will become jointly and severally liable for the unpaid VAT of all UK traders, as well as overseas traders.
- There will be many changes to business rates, including: bringing forward to 2018 the switch in indexation from RPI to the generally lower CPI; retrospective legislation to deal with the impact of the so-called ‘staircase tax’ by recalculating valuations and qualification for small business relief to the position in the period before April 2010; and increasing the frequency of revaluations to every three years after the next valuation due in 2022.