2018 Autumn Budget Summary
30 October 2018
In what was designed to be the last Budget speech before Brexit, the Chancellor, Philip Hammond, outlined the government’s vision for post-Brexit Britain. Measures were aimed at backing up businesses, infrastructure and the health service. Below is our summary of the main announcements with detail in our attached analysis:
- For UK tax payers the personal allowance will be raised to £12,500 from April 2019, one year earlier than planned. The higher rate threshold will also rise to £50,000 from April 2019, also a year earlier than planned, and will remain at the same level in 2020/21. Rates and thresholds for Scotland will be announced in the Scottish Budget on 12 December.
- The lifetime allowance for pension savings will increase to £1,055,000 for 2019/20 in line with CPI.
- The annual investment allowance (AIA) will increase to £1 million for all qualifying investments in plant and machinery made on or after 1 January 2019 until 31 December 2020. Additionally there is a new 2% capital allowance for commercial and industrial buildings.
- For entrepreneurs’ relief, the minimum period throughout which the qualifying conditions for relief must be met will be extended from 12 months to 24 months from 6 April 2019. Further anti-avoidance measures will apply from 29 October 2018.
- From 1 April 2020, companies will be subject to a 50% limit on the proportion of annual capital gains that can be relieved by brought-forward capital losses. Companies will have unrestricted use of up to £5 million capital or income losses each year.
- Capital gains tax lettings relief will only apply where the owner of the property is in shared occupancy with the tenant. The final period exemption will also be generally reduced from 18 months to nine months. A consultation period will follow.
- The VAT registration threshold be maintained at the current level of £85,000 until April 2022.
- From 1 April 2020, the amount of payable research and development (R&D) tax credits that a qualifying loss-making company can receive in any tax year will be restricted to three times the company’s total PAYE and NICs liability for that year.
- From 6 April 2020, when a business enters insolvency, HMRC will be a preferred creditor for taxes collected by the business for the government such as VAT, PAYE income tax, employee NICs, and construction industry scheme deductions – but not such taxes as corporation tax and employer NICs.
- Large social media platforms, search engines and online marketplaces will be pay a 2% tax on the revenues they earn which are linked to UK users from April 2020.
- Fuel duty was frozen, alongside beer and spirits.
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