Philip Hammond's first and last Spring Budget is not quite as bland as, perhaps, it initially seemed, and some of the key points are discussed below:
The Chancellor has drastically cut the dividend allowance that was introduced by his predecessor, down from £5,000 to just £2,000 per annum, which will not go down well with OMBs (owner managed businesses). This measure will impact from April 2018 so there is still one more year (2017/18) at the current level of dividend allowance of £5,000 tax-free.
The self-employed, with profits in excess of £16,250, are on the receiving end of a hike in their Class 4 National Insurance Contributions, although this increase is an effort to ensure more equity in the National Insurance Contributions between the employed and self-employed, now that the self-employed are receiving better state pension provision under the new state pension rules, which commenced in April 2016.
From 1 April 2017, the VAT registration and deregistration thresholds will increase in line with inflation by £2,000 to £85,000 and £83,000 respectively.
As discussed elsewhere on our News Blog, the date for the implementation of Making Tax Digital has been postponed for one year, until April 2019, for those businesses and landlords whose income is below the VAT threshold.
The main changes to the non-dom regime legislation have been well documented and draft legislation is already out for consultation but, in the Budget yesterday, there were a few minor additions - namely the extension of the transitional rule permitting non-doms to segregate their existing "mixed fund" accounts so that now this applies to pre-2007/08 accounts, too. In addition, in order to encourage UK investment by non-doms, the Chancellor announced some changes to Business Investment Relief to make it more attractive and more widely available.
There is no change to the proposed reduction in corporation tax rates, so the new 19% rate will apply from next month, as originally intended.
If you have any questions on any of the above, or on other provisions announced yesterday, then please contact us on: firstname.lastname@example.org