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Autumn Budget 2017

Chancellor Philip Hammond gave his Autumn Budget on 22 November 2017 but apart from the somewhat poor jokes what was in it for you?!

We think it was perhaps more what he didn’t do that made the difference, specifically by freezing the VAT threshold which had been rumoured to be reduced significantly bringing the extra burden of VAT to more small businesses and their customers.

The ‘headline grabber’ for first time buyers and the temporary reduction in Stamp Duty Land Tax (SDLT) does not, of course, apply here in Scotland with us having the Land and Building Transaction Tax (LBTT) so the ‘Tartan Budget’ is another one to watch out for and Finance Secretary Derek Mackay will be presenting the next Scottish Budget on 14 December.

The last Spring Budget?

Chancellor Philip Hammond gave what he described as the last spring budget but what was in it for you?!

On a quick review, the following snippets may be of interest to our clients in particular:

  • Increases to Class 4 National Insurance rates for Self Employed;
  • Reduction in the Dividend Allowance;
  • Changes to the timing of Making Tax Digital for smaller businesses;
  • Increase in cash basis threshold for smaller businesses.

Is your new tax coding correct?

We are seeing more errors in PAYE codings than before as HMRC’s systems move towards automated processing.

For example, projected underpayments are being included in codings for previous years when they shouldn’t be, and on occasion where one off pension payments are received, those are taken as continuing affecting personal allowances!

Whilst this may be a temporary system blip, in our experience it is best to check all codings carefully and speak with HMRC if you are at all unsure. If, of course, we can assist in doing this for you, why not give us a call?

Whilst we have no reason to believe the above is not accurate it is for general guidance only.  Buick & Co Chartered Tax Advisers and Tax Consultants take no responsibility whatsoever for this blog, its reliability or any actions you take having read it.

Déjà vu Budget?

Well, with a headline grabbing Corporation Tax cut to 17% from April 2020 this sounds a little like “we’ve been there before” with last summer’s Budget announcing something similar, but was that all?!

On a quick review, the following snippets may be of interest to our clients:

  • Tax free Personal Allowance increased to £11,500 from 6 April 2017;
  • Basic rate tax band increased to £33,500 from 6 April 2017;
  • Class 2 NIC being abolished from 2018 for Self Employed;
  • Capital Gains Tax rates from 6 April 2016 cut to 20% from 28% and 10% from 18%, but no change for residential property;
  • Corporation tax rates being reduced from 20% to 19% in 2017 and 17% in 2020;
  • Corporation Tax loan to participators tax rate to increase from 25% to 32.5% from 6 April 2016;
  • New Lifetime ISA from April 2017 for under 40s to fund first house purchase, or keep until 60 – Up to £4,000 can be saved each tax year and Government will put in 25%.
  • ISA limit increased from April 2017 to £20,000;
  • Pension changes - Lifetime Allowance reduced to £1M from April 2016 and Annual Allowance restricted for individuals who have income for a tax year greater than £150,000 from 6 April 2016 (announced previously);
  • Land and Buildings Transaction Tax (LBTT) supplement of 3% on second home or buy to let property in Scotland from 1 April 2016 (announced previously - with similar 3% Stamp Duty Land Tax (SDLT) charge for rest of UK as LBTT replaced SDLT in Scotland in April 2015);

The following link to HMRC’s website gives more information:

https://www.gov.uk/government/collections/budget-2016-tax-related-documents

Whilst we have no reason to believe the above is not accurate it is for general guidance only.  Buick & Co Chartered Tax Advisers and Tax Consultants take no responsibility whatsoever for this blog, its reliability or any actions you take having read it.

Is it the end for the buy to let landlord?

Well that is an interesting question from a purely tax perspective! 

At the time of writing, there has been quite a shake up in the taxation for buy to let landlords. 

Well what has changed?

Quite a bit really, and here is a taster:

·         From 6 April 2016 the 10% “wear and tear” allowance for furnished lettings is no longer available although you will be able to claim costs actually incurred on replacement furnishings;

·         If you are buying a second home or a buy to let property then from 1 April 2016 a 3% Land and Buildings Transaction Tax (LBTT) charge will apply in Scotland (with a similar 3% Stamp Duty Land Tax (SDLT) charge for the rest of the UK as LBTT replaced SDLT in Scotland in April 2015) in addition to any LBTT due already.  The new tax will affect properties which cost more than £40,000;

·         Higher rate tax relief on interest on loans to buy rental residential property is being phased out from 6 April 2017.

Where can I find out more?

You could speak with us to see if we can help, or your tax adviser, accountant, or read further using our link to HMRC’s website:

https://www.gov.uk/government/publications/reform-of-the-wear-and-tear-allowance/reform-of-the-wear-and-tear-allowance

https://www.revenue.scot/news/news/changes-lbtt-and-slft

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

A green monopoly house

Picture Courtesy of The Guardian

The above is for general guidance only.  Buick & Co Chartered Tax Advisers and Tax Consultants take no responsibility whatsoever for this blog, its reliability or any actions you take having read it.

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