How will yesterday’s Autumn Budget affect you and your business?
Well there wasn’t a great deal to get excited about in either a good or bad way, and with Brexit looming any predictions or forecasts are far from definite.
Below we have picked out the facts and changes that may impact you and your business over the coming year.
Personal Tax
- The Personal allowance to increase from £11,500 (2017-18) to £11,850 in (2018-19) with commitment to reach £12,500 by 2020 meaning you can earn more before having to pay income tax
- The higher rate tax threshold is increasing from £45,000 to £46,350 with a commitment for it to reach £50,000 by 2020
- The dividend tax free band reduces from £5,000 to £2,000 from April 2018, meaning those receiving dividends will be paying more tax on them from 2018 onwards.
Corporation tax
- The main rate has been frozen at 19%, with it falling to 17% from 1 April 2020
- The Research and Development tax credit for those undertaking those activities will increase from 11% to 12%
Business rates
- The annual uplift in rates with be linked to the CPI rather than RPI from April 2018, which is generally a lower figure so businesses can expect rate increases below the overall level of inflation
- There will be more frequent revaluations for business rates from once every five years to once every three3 years until 2022. This will hopefully be more reflective of fluctuations in property valuations, but obviously means more work, meaning some will be pushed onto businesses
- As part of the more frequent revaluations, businesses will need to make more frequent reports to the government on any changes in values known as ‘hybrid self-assessment’. The financial and time burdens of this for small businesses is under consultation so may well change.
Transport taxes
- There will be a new Vehicle Excise Duty (VED) supplement for new diesel cars from 1 April 2018, making them less tax efficient business vehicles
- There will also be a rise in the benefit in kind of diesel company cars from 3% to 4%, meaning they will be more expensive for both the company and employee
- There will be no benefit in kind chargeable for allowing staff to charge electric cars so clearly the government is encouraging a move away from diesel vehicles to more energy efficient and environmentally friendly vehicles.
Obviously, there are many more elements to the budget so if there is anything specific you have a question on please do speak to your accountant.