Nobody quite knew what to expect from Autumn Budget 2017, with the government remaining tight lipped in the run-up to the chancellor’s unusually witty speech.
Normally rumours, or a lack of them in this case, are a sign of things to come and it was no different when chancellor Philip Hammond delivered his second Budget of the year on 22 November 2017.
A range of measures designed to boost business and productivity were announced.
Amid a background of discontent surrounding business rates, Hammond revealed future increases will be determined by the Consumer Prices Index measure of inflation from April 2018.
The measure comes into effect 2 years earlier than originally planned and will replace the Retail Prices Index, which determined the controversial 3.9% business rates rise announced in October 2017.
Corporation tax remains at 19% and is on track to be lowered to 17% by 2020, while the VAT threshold will remain unchanged (at £85,000) for the next 2 years.
The chancellor also pledged to invest a further £2.3 billion into R&D, which sees an increase to its main tax credit – the R&D Expenditure Credit (RDEC) for larger companies – from 1 January 2018.
Investment limits for enterprise investment schemes will be doubled – from £1 million to £2 million – from April 2018 for knowledge-led companies only.
The tax-free personal allowance increases by £350 a year – up from £11,500 in 2017/18 to £11,850, and the higher-rate threshold rises from £45,000 to £46,350 from 6 April 2018.
While ISAs and pensions went largely untouched, the junior ISA allowance will be raised from £4,128 to £4,260 and the lifetime pension allowance is up to £1.03 million for 2018/19.
The national living wage will increase from £7.50 an hour in 2017/18 to £7.83 an hour in 2018/19 – a year-on-year rise of 4.4% for those aged over 25.
Following recommendations made by the Low Pay Commission, the following hourly rates will apply to eligible workers from April 2018:
|21 to 24||£7.38||£7.05|
|18 to 20||£5.90||£5.60|
|16 to 17||£4.20||£4.05|
*Hourly rate applies to apprentices under 19 or in first-year apprenticeships.
As previously announced, the dividend allowance is due to reduce from £5,000 a year to £2,000 from April 2018.
Get in touch
With around 4 months until the start of the new financial year, there’s ample time to contact our team of experts with any questions you may have on your business or personal finances.
In the meantime, you can read our Autumn Budget 2017 report in full and we wish you a Merry Christmas from all of us at Stapletons.