In the Budget speech the Chancellor announced that he has requested a report to be delivered in the summer on the wider implications of different employment practices. Also the Budget included changes to NICs and the Dividend Allowance.
In December and January the government issued a number of the clauses, in draft, of Finance Bill 2017 together with updates on consultations.
The Budget updates some of these previous announcements and also proposes further measures. Some of these changes apply from April 2017 and some take effect at a later date.
Our summary focuses on the issues likely to affect you, your family and your business. To help you decipher what was said we have included our own comments. If you have any questions please do not hesitate to contact us for advice.
It has already been announced in the 2016 Budget that Class 2 NICs will be abolished from April 2018. The government will now also legislate to increase the main rate of Class 4 NICs from 9% to 10% with effect from 6 April 2018 and from 10% to 11% with effect from 6 April 2019.
Extensive change to how taxpayers record and report income to HMRC are being introduced under a project entitled Making Tax Digital for Business.
It was announced a one year deferral for unincorporated businesses and unincorporated landlords with turnover under the VAT threshold. For those in excess of the VAT threshold the commencement date will be from the start of the accounting period begin after 5 April 2018.
From April 2017 many unincorporated property businesses will computer taxable profits for the purposes of income tax on a cash basis rather than the usual accruals basis. This means that a tax return for 2017/18, which has been submitted by 31 January 2019 will be the first one submitted on the new basis.
Business rates have been devolved in Scotland, Northern Ireland and Wales. The revaluation takes effect from April 2017 in England.
The Chancellor announced support for small businesses losing Small Business Rate Relief to limit increases in their bills to the greater of £600 or the real terms transitional relief cap for small businesses each year.
The government will also introduce a £1,000 business rate discount for public houses with a rateable value of up to £100,000 for one year from 1 April 2017. This is subject to state aid limits for businesses with multiple properties.
The Dividend Allowance will be reduced from £5,000 to £2,000 from April 2018.
Corporation Tax rates have already been enacted for periods up to 31 March 2021. The rate is currently 20% which will then reduce to 19% for the financial years beginning 1 April 2017, 2018 and 2019. It will then reduce to 17% for the financial year beginning 1 April 2020.
The personal allowance is currently £11,000. This will increase to £11,500 for 2017/18.
For more information of the Budget please read our summary.
Member since: 11th December 2014
I have worked for Gibbons Mannington & Phipps LLP since 2000 and became a Partner in January 2018.