Autumn Budget 2018 - What does this mean for you?

The Chancellor Phillips Hammond has delivered the latest Budget for 2018. Pearson Hards Solicitors has put together a useful summary detailing what some of the key changes may mean for you.

The information below is based on our understanding of the latest Budget and not intended to be advice. Specific details may of course change when final legislation and supporting documentation is ultimately published.

Tax

Everyone has their own personal allowance, which is the amount they can earn each year, without having to pay income tax. This allowance will be rising from £11,850 to £12,500 from April next year.  In a nutshell, moving forward this will mean that a basic rate taxpayer will be expecting to make an annual saving of £130.

Together with the increase to the personal allowance, the Chancellor also announced an increase to the threshold at which an individual will start paying the higher rate of income tax. Currently the higher rate of 40% applies on earnings from £46,351 up to £150,000. From April 2019, that threshold will increase to £50,000. Therefore a higher rate taxpayer could expect to make an annual saving of £860.

The national living wage will also increase by 4.9% to be set at £8.21 per hour for the over-25s.

Stamp Duty

If you are a first-time buyer purchasing a shared equity home of up to £500,000, you will be eligible for first-time buyer’s relief on stamp duty land tax (SDLT). If you, and anyone else you’re buying with, are first time buyers of a residential property, you can claim relief on purchases made on or after 22nd November 2017 and where the purchase price is no more than £500,000.

The relief will apply retrospectively from 22nd November 2017, so if you have paid SDLT after this specific date, you may be due a refund.  The relief will be applied to the first share purchased where the market value of the shared ownership property is £500,000 or less.

Rates of stamp duty land tax remain unchanged for properties in England and Northern Ireland. There is no SDLT payable on the first £300,000 and 5% is payable on the remainder up to £500,000. However, a higher rate of SDLT is payable by individuals purchasing an additional property. This also applies to individuals who are purchasing a new home before having sold their previous home. 

VAT

The VAT-registration threshold for businesses was frozen at £85,000 until 1 April 2020 in the last Budget although that has now been extended until 1 April 2022. It is expected that the Government will revisit options for reforming VAT, once final terms for the United Kingdom’s exit from the EU, have been agreed.

Businesses

If you are a small retail business owner in England with a rateable value below £51,000, you will see your business rates reduced by a third. This is expected for a duration of two years from April 2019, subject to state aid limits.

The main rate of corporation tax rests at 19% for 2019/20 and the goal of cutting the rate of corporation tax to 17% in 2020/21 has been repeated by the Government.

Duties

Duty on fuel is frozen at 57.95p per litre of petrol and diesel. Duties on beer, most ciders, and spirits remain unchanged for 2019/20. However the cost of a bottle of wine will rise by 8p, in line with inflation from February 2019.

If you are looking for specific and discrete legal advice whether as a business owner or as an individual, then please do not hesitate to contact Pearson Hards Solicitors.