Our Autumn Budget 2017 Commentary

Category: Taxation - Posted On: Nov 22 2017

Chancellor, Philip Hammond, delivered his latest Budget earlier today with his usual dry wit and good natured barbs directed at the other side of the Commons.

In tax terms, little of real note, and as usual, a careful review of press releases and announcements will be required.  At an initial glance, we would note: –

  •  An increase to individuals’ personal allowances for 2018/19 to £11,850
  • A rise in the basic rate threshold for 2018/19 to £46,350 (unlikely to be applied in Scotland)
  • An increase to the R&D relief for large companies to 12%
  • The freezing of indexation for companies on capital gains, indexation to be frozen at January 2018
  • Major changes in stamp duty for first time buyers (we have yet to see whether LBTT will follow)
  • VAT registration threshold unchanged at £85,000

Head of EQ Taxation, David Morrison, commented “in some ways, this Budget was notable for what did not change. The future corporation tax reduction to 17% with effect from 1 April 2020 is to be retained and the widely predicted reduction in VAT threshold  is not happening, with the registration limit held at £85,000, a welcome boost for small businesses.

The Chancellor is seeking to encourage innovation within the UK and to encourage investment into the UK and the further extension to R&D tax credits for large companies is again to be welcomed. Of most concern to me and my tax team is the continuing lack of direction in tax avoidance, specifically what this actually means.  Many decisions are tax motivated, for example when to invest in a piece of new machinery, whether to make a pension payment or to provide against a doubtful debt.  In certain areas, the motive to avoid tax is cited as a reason to deny certain reliefs but we, as advisers, have little clarity as to the boundaries.

I suppose we should be glad of a relatively quiet budget for the small and medium sized business. Just waiting for the Scottish Finance Secretary, Derek Mackay, to add his tuppence worth when the Scottish Budget is published on 14th December 2017”.

Don’t forget to book your place at our Annual Budget seminar at Balbirnie House on Wednesday 29 November from 5-7.30pm. Our partner, Ross Oliphant will deliver our informed comment and concise analysis on the Budget and how it will impact you and your business. He will also provide an insight into how you can extract value from your business in the most tax efficient manner.

You can find more information here. To book your place, please email laura.hutt@eqaccountants.co.uk or call 01592 630055.