Latest News and Events

A Budget for the Future

With Brexit negotiations in full swing and mixed messages coming forward on the economy this was never going to be an easy budget to call. Particularly so as the Chancellor, Philip Hammond, also highlighted the fact that the world is on the brink of a technological revolution which will change the way we work and live for generations to come.

In recognition of these factors, the Autumn 2017 budget focused on measures which were aimed at preparing the country to maximise its opportunities and to embrace the future. Creating a modern industrial strategy, investing in R&D and infrastructure and boosting skills therefore formed the backbone of this budget. Measures proposed included:

•  Boosting the national productivity investment fund
• Allocating a further £2.3 billion for investment in R&D and increasing the R&D tax credit to 12%
  
• Investing £500 million in 5G, full fibre broadband and AI
  
• Doubling EIS investment for knowledge intensive companies
  
• Boosting investment in the NHS
  
• A £1.7 billion transforming cities fund alongside £1 billion of discounted lending made available to local authorities to support infrastructure projects.
  

Business corporation tax rates are to remain unchanged with the exception of the indexation allowance on capital gains which is to be frozen from January 2018. The VAT threshold is also to remain at £85,000 for the next two years; a measure which is designed to help Britain’s smaller businesses, alongside measures announced in respect of business rates including removing the anomaly of the staircase tax.

Moving onto the personal tax measures announced, it’s very much a game of winners and losers with the losers being affected by increases in some duties. From April 2018 the personal allowance is to rise to £11,850 with the higher rate at £46,350. The national living and minimum wage rates are also to increase. As expected there are further tax rises for tobacco and cigarettes. When it comes to alcohol, the majority of duties are frozen with the exception of some high-strength low quality products which face increases in duty from 2019.

Car drivers will see the proposed fuel duty rise due in April 18 put on hold. However, drivers of the most polluting diesel cars will see their VAD rise by one band, whilst company car drivers will see the supplementary diesel tax rate rise by 1%. On the plus side, people who charge their electric vehicles at work will not face a benefit in kind charge from next year. For those who travel further afield air passenger tax will generally also be frozen, with the exception of long haul premium tickets and those who travel by private jet.

Construction, infrastructure and the housing market came in for particular mention with a raft of measures which are designed to boost construction, particularly in urban areas thereby enabling the continued protection of greenbelt land. These measures include the provision of financial incentives, financial guarantees and the boosting of construction skills. Action is to be taken to enable local authorities to charge 100% council tax premium on empty properties whilst a commission is to investigate the substantial discrepancy between planning permission granted and homes built with a view to taking appropriate action.

When it comes to housing, the highlight of the budget is the abolition of stamp duty on homes costing less than £300,000 for first time buyers. In order that first-time buyers in high-priced areas are not excluded, stamp duty is also abolished for the first £300,000 of homes costing up to £500,000. This will mean that stamp duty is effectively abolished for 80% of first-time buyers.

If you’re looking to create an investment portfolio, or if your situation has changed and you may therefore need to review your existing portfolio, contact Beckworth by using one of the links on our website.