Autumn Budget 2017
The Chancellor’s budget speech on 22 November was one of plentiful one-liners, much rhetoric but ultimately contained little in the way of real surprises. Philip Hammond outlined a vision of a Britain that was ‘fit for the future’ that combines fiscal responsibility whilst making funds available to invest in infrastructure. There is no doubt that the OBR’s downgraded economic growth forecast along with the continuing uncertainty over the Brexit process made it a difficult environment for the Chancellor to be too adventurous with his Budget speech.
For individuals there was the usual inflationary increases in the tax free personal allowance and CGT annual exemption with similar adjustments to the Tax/NIC bandings. The National living wage was also increased to £7.83 from April 2018. The Scottish Budget on 14th December will see whether or not the Scottish Government intend to pass on the increase in the higher rate tax threshold to Scottish resident taxpayers.
Duty on alcoholic drinks other than strong ciders is being frozen at 2017 levels and the Chancellor has again scrapped the fuel duty increase planned for April 2018.
For businesses, technology and innovation were a key part of the Chancellor’s speech with R&D tax credit seeing an increase from 11% to 12% along with a doubling of the EIS investment limit with particular reference to encouraging investment in knowledge intensive companies.
After much discussion in the press in the run up to the Budget the Chancellor saw sense and opted not to reduce the VAT registration limit but he did announce a two year freeze in the limit whilst a consultation is carried out to review the position. He also underlined a commitment to retaining the UK’s competitiveness in terms of corporate tax rates although the indexation allowance on corporate capital gains has been frozen from 1st January 2018.
Capital Gains Tax – UK Property owned offshore
Interestingly, one measure hidden in the small print was the announcement that the government intends to also bring disposals of non-residential property within the charge to UK capital gains tax. This potentially has significant implications for areas such as London with high levels of foreign property ownership so it will be interesting to see how the market reacts, particularly as anti-avoidance rules have been introduced to catch arrangements made after 22 November 2017 in anticipation of the new rules.
SDLT – First Time Buyers
Again, we’ll need to wait to see if the Scottish Budget introduces a similar exemption from Land & Buildings Transaction Tax (LBTT) but as a final flourish the Chancellor announced a new exemption from Stamp Duty Land Tax for first time buyers on property purchases up to £300,000 (or on the first £300,000 where the property purchase is up to £500,000).
We’ve put together a detailed summary of the Budget 2017 announcements for your information so hopefully you’ll find this useful, it can be downloaded here: Autumn_Budget_2017