Personal Allowance
The Chancellor has announced that the 2015 manifesto pledge to increase the personal allowance to £12,500 and the higher rate threshold to £50,000 from April 2020 has been accelerated and is to apply from April 2019. The allowance / threshold will remain in place for 2020/2021 and will then increase in line with the Consumer Price Index (CPI).
Starting Tax Rate for Savings
There have been no changes to the band of savings income that is subject to the 0% starting rate and this will be kept at the current level of £5,000 for 2019/20.
Lifetime Allowance for Pensions
The lifetime allowance for pension contributions will increase in line with the CPI for 2019/20, rising to £1,055,000.
Individual Savings Account
The adult ISA annual subscription limit for 2019/20 will remain unchanged at £20,000.
Child Trust Funds and Junior ISAs
The annual subscription limit for junior ISAs and child trust funds for 2019/20 will be increased in line with CPI to £4,368.
Entrepreneurs Relief (ER)
The minimum period throughout which the qualifying conditions for ER must be met is to increase from 12 months to 24 months with effect from 6 April 2019. In addition, to tackle perceived misuse of ER, two further tests will be added to the definition of personal company to require the claimant to have a 5% interest in both the net assets of the company and the distributable profits. This is in addition to the requirement that at least 5% of the ordinary share capital and voting power must be held.
Private Residence Relief
The government intends to shorten the final period of exemption from the current 18 months to just 9 months from April 2020. There is to be a reform to lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant. This would not cover periods where the owner of the property has moved out of the property (perhaps working overseas for a short period) and the property is let during their period of absence
Rent a-Room Relief
Following consultation, the government has resisted substantial modification to the rent a room relief rules and the government will retain the existing qualifying test of letting in a main or only residence.
Business Rates
The government is proposing to cut by one third the business rates for retail properties with a rateable value of below £51,000 where their building is used in certain eligible trades.
SDLT for Non-Residents
The government intends to publish a consultation early next year on an SDLT charge of 1% for non-residents buying residential property in England and Northern Ireland.
Business Tax
Annual Investment Allowance (AIA)
The government intends to increase the AIA from £200,000 to £1,000,000 to all qualifying investments in plant and machinery made by a business on or after 1 January 2019 until 31 December 2020.
Structures and Building Allowance
New non-residential structures and buildings will be eligible for a 2% capital allowance where all the contracts for the physical construction works are entered into on or after 29 October 2018.
Capital Allowances Special Rate Reduction
From April 2019 the capital allowances special rate for qualifying plant and machinery assets will be reduced from 8% to 6%.
Enhanced Capital Allowances (ECAs)
The government intends to end ECAs and first year tax credits for technologies on the energy technologies list and water technology list from April 2020.
Electrical Vehicle Charge Points
The government intends to extend the enhanced capital allowances for companies investing in electric vehicle charge points through to 31 March 2023.
VAT Registration Threshold
The VAT registration threshold will be maintained at the current level of £85,000 of taxable supplies until April 2022.
Rate of Tax
It has been confirmed that the reduction in the rate of corporation tax from 19% to 17% will apply from April 2020, as originally announced in Finance (No 2) Act 2015.
Digital Services Tax
The government intends to introduce a new 2% tax on the revenues of certain digital businesses. It is intended that this new tax will only apply to groups that generate global revenues from in-scope business activities in excess of £500m per annum.
Corporate Capital Loss Restriction and Loss Relief Rules
The government will be making amendments to the rules around the utilisation of corporate capital losses and loss relief rules to tighten what they might consider to be abusive arrangements.
Intangible Fixed Assets
The government will seek to introduce targeted relief for the cost of goodwill in the acquisition of businesses with eligible intellectual property from April 2019. Also proposed is a reform of the intangibles rules to protect businesses from unwanted de-grouping tax charges arising from a tax-exempt share disposal (subject to the Substantial Shareholding Exemption).
Offshore Receipts in Respect of Intangible Property
As previously announced, the government is introducing legislation in the fourth coming finance bill to tax income from intangible properties held in low tax jurisdictions to the extent that is preferable to UK Sales. It is expected that this tax will replace withholding tax on royalties.
Off-Payroll Working in the Private Sector - IR35
Following consultation, the government will look to shift responsibility for operating the off-payroll working rules from individuals to the private sector organisation, agency or other 3rd party engaging the worker. Small organisations are intended to be exempt and medium and larger organisation will have until April 2020 in order to put in place the necessary systems and procedures to operate these rules.
Employment Allowance
In order to restrict the application of the employment allowance to the smallest of employers, with affect from April 2020 the government will restrict access to the employment allowance to employers with a national insurance contribution bill of £100,000 or less in the previous tax year.
Although originally announced in budget 2017, the government continues to intend to publish a consultation on the taxation trust with a view to making a taxation simpler, fairer and more transparent.
The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice. No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.