Budget 2018 – Summary

Philip Hammond presented the 2018 Budget on Monday 29 October 2018.

This blog focuses on the direct and indirect tax measures announced, as well as the announcements made previously which affect the 2018-9 tax year and beyond.

It concentrates on the issues likely to affect you, your family and your business.

If you have any questions please do not hesitate to contact me for advice.

Main Budget proposals from the Autumn Budget

  • The income tax personal allowance for 2019-20 and 2020-21 will be £12,500 and the 40% threshold will be £50,000.  For subsequent years, increases to the personal allowance and basic rate limit will be indexed with the CPI (The Consumer Price Index)
  • Class 2 National Insurance, planned to be abolished from April 2019 will not now be abolished during this parliament.
  • There will be new off-payroll working rules for workers in the private sector from April 2020.
  • A tax return and payment on account of tax will be due on the sale of residential properties by UK residents, where tax is due, from April 2020.

A reminder of key changes announced previously

  • The income tax personal allowance for 2018-9 is £11,850 and the 40% threshold is £46,350.
  • The VAT registration threshold will be frozen at £85,000 for two years and there will be a consultation on its future.
  • Indexation allowance for capital gains in companies has been frozen for disposals after 1 January 2018.
  • The nil rate dividend allowance reduced to £2,000 from April 2018.
  • Corporation tax rates will fall to 17% from 1 April 2020 (Current: 19%).
  • The changes to interest deduction rules for landlords started from April 2017, being phased in over a 4 year period.  Relief for interest will be limited to basic rate tax.

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