• Abstract and Figures
• Public Full-text

Crucial insight from the Croner-i in-house team of tax writers Autumn Budget 2018 - More treat than trick? 2 Budget 2018 Report: More treat than trick? Foreword Contributed by Paul Robbins Welcome to the latest of Croner-i’s Budget briefings. Paul Robbins ACA, CTA Our expanded team of tax experts (welcome Sarah Arnold, Sarah Kay, Stephanie Webber and Lindsey Wicks) has considered the announcements under the following headings: Paul Robbins is the content and innovation manager for • Income tax and NIC Croner-i Tax. • Pensions and savings tax • Charity taxes After graduating, Paul worked • Capital gains tax in the tax departments of two • Inheritance tax large firms now absorbed into • Business tax the Big 4 before joining Croner-i • Enterprise tax as a tax technical writer • Corporate tax specialising in corporates. • Property tax • Stamp taxes and ATED At Croner-i he has held various publishing posts whilst also • VAT managing the team of in-house tax writers and being lead • Energy and transporttax technical editor on a number of core titles. He is now • Environmental tax responsible for the quality and development of the • Indirect tax Croner-i tax portfolio. • EU exit • Administration • Avoidance and evasion I won’t steal their collective thunder by covering particular announcements here. Suffice to say that We continue to invest heavily in our other tax while the Spring Statement 2018 had more tax than commentaries and our source materials databases to was promised the Autumn Budget 2018 has more tax help you get to grips with all planned and unplanned than first meets the eye. changes as they happen. I would also say that the international context The next date for your diary is the 7 November when continues to be important. Not just the all-pervasive the Finance Bill 2019 will be published. Finance Act uncertainty over Brexit but also the new digital services 2019 is then expected to get Royal Assent in February tax and attempts to counteract tax avoidance via the 2019 as the government clears the decks ahead of BEPS project. The latest edition of our Schwarz on Tax Brexit. Treaties covers these and other tax treaty developments and provides the most authoritative As ever, Tax Update, Croner-i’s weekly e-alert, will commentary on the multilateral instrument currently keep our customers fully abreast of all the available. developments in the tax world during what promises to be an eventful 2019. At Croner-i we have just launched Navigate Tax and will shortly be launching Practical International Tax When the next Budget will be and who will be Planning. Both these new services have the same goal delivering it are less predictable than ever. – to enable practitioners to provide authoritative tax advice on a cost-effective basis. Both do this by focussing on real-life scenarios and providing clear and concise commentary supported by many useful tools. We continue to invest heavily in our other tax commentaries and our source materials databases to help you get to grips with all planned and unplanned changes as they happen. 3 Budget 2018 Report: More treat than trick? Summary Contributed by Stephen Relf More treat than trick? October is a strange month. In the supermarket, Stephen Relf Mphil, FCA, CTA Halloween costumes and Christmas decorations compete for our attention, making us choose between broomsticks and baubles, between horror and joy. The Stephen specialises in the tax Chancellor faced a similar dilemma in the run-up to the affairs of owner-managed Budget. Should he continue to chase a budget surplus, businesses. Before joining slashing tax reliefs and making deeper cuts to public Croner-i, Stephen was Head of spending; or should he signal an end to austerity, the Technical Team at the borrowing to fund gifts for the NHS and others? Chartered Institute of Taxation (CIOT) and before that he Buoyed by improved fiscal forecasts, the Chancellor worked in practice, for PwC, opted for mince pies over pumpkins; to use his own and in industry, for Northern words, his speech was less ‘Hammo House of Horrors’ Rock. He continues to be involved with the CIOT as chair of and more ‘Spreadsheet Phil turns Santa Claus’. Almost the CIOT's Working Together committee. all of us made it onto the nice list in some way or another, thanks in large part to the Chancellor’s Stephen combines his role as a tax writer at Croner-i with decision to accelerate increases in the income tax day-to-day tax work as a director of Applause Accountancy personal allowance and the higher rate threshold. Services Ltd. However, the Budget was not short of shock; some may shiver at the changes to the IR35 rules for larger As Lead Technical Writer Stephen helps lead the team of businesses, for example. writers. A summary of the main Budget announcements is provided below. For detailed commentary on the changes to the tax rules, rates and allowances, see the Income tax and National Insurance (NI) sections that follow. In the run-up to the Budget, there had been speculation that the Chancellor would abandon The economy planned increases in the personal allowance and the The outlook is much improved on the Spring higher rate threshold. Not so. Rather, the Chancellor Statement: borrowing for the year is £11.6bn lower has chosen to ‘double down’; the personal allowance than expected, coming in at 1.2% of GDP and it is set to will stand at £12,500, and the higher rate threshold at fall to 0.8% of GDP by 2022-23; and national debt, £50,000 one year ahead of schedule, from April 2019. which peaked at 85.2% of GDP in 2016-17, will fall to Recent changes to the personal allowance in particular 83.7% this year and to 74.1% in 2023-24. Add to this have been staggering; by next spring, it will have the continued ‘jobs miracle’ – the OBR predicts almost doubled compared to 2010-11. 800,000 more jobs by 2023 and sustained real wage growth in each of the next five years – and you begin There is little to report from a NI perspective, other to understand why the government feels able to than the reform of the £3,000 employment allowance. loosen the purse strings to such a significant extent. From April 2020, this will be restricted to employers with an employer NI bill below £100,000. This looks to be a smart move for the government; larger businesses are unlikely to complain too loudly about losing £3,000 per year, and the government will save £1.3bn by 2023-24 as a result of the measure. 4 Budget 2018 Report: More treat than trick? Business taxes • the temporary increase from 1 January 2019 of the Probably best to get the bad news out of the way first. annual investment allowance to £1 million; • a new 2% capital allowance for new non-residential As expected – some may say, feared – the government structures and buildings where contracts are has confirmed that it will reform the off-payroll entered into on or after 29 October 2018; and working rules (IR35) in the private sector, bringing • changes to the intangible fixed assets rules to give businesses in line with public-sector organisations. This relief for goodwill on the acquisition of a business will be a hugely unpopular move in some quarters but with eligible intellectual property from April 2019; if there is some good news, it’s that the changes will and the reform of the de-grouping rules with effect not take effect until April 2020. Further, the changes from 7 November 2018 so that they more closely will not apply to smaller businesses. The government align with equivalent rules for other assets. has pledged that HMRC will provide support and guidance to medium and large organisations ahead of Importantly, the reduction in the rate of corporation implementation. tax to 17% from April 2020 remains on the statute book. Another revenue-raiser for the government is the introduction of a new digital services tax (DST). From Property taxes April 2020, the government will charge a 2% tax on the The Chancellor continues to follow some clear trends ‘global giants’ with regard to search engines, social with regard to property taxes; there is support for media platforms and online marketplaces with UK payers of business rates, more help for first-time users. The government will apply the DST until such buyers and a further tightening of the rules for time as a multinational solution to the digital services landlords. issue is in place. The main winner under the business rates heading is Other changes include: the high street. From April 2019, the government will cut business rates bills by one-third for retail • a new tax on income from intangible property held properties with a rateable value below £51,000, in low-tax jurisdictions to the extent that it is benefiting up to 90% of retail properties. To prevent referable to UK sales. You may remember this one abuse of the business rates rules, the government will as the Royalties Withholding Tax; consult on the criteria under which self-catering and • a new restriction for brought forward capital losses holiday lets become chargeable to business rates similar to that applying for other types of losses (eg rather than to council tax. relief restricted to 50% of the gain; large businesses only); First-time buyers’ relief from Stamp Duty Land Tax • reducing the administrative burden on charities by, (SDLT) will be extended and backdated to 22 amongst other things, increasing the threshold for November 2017 so that all qualifying shared small trades; ownership property purchasers can benefit from the • a tightening of the rules for entrepreneur’s relief.

Load more

  36

Copy Link