Other matters

 In General, Information, Legislation, Tax

 

This blog is based on points from the Chancellor’s 2017 Budget.

 

• Next April, the annual personal allowance will be raised to £11,850.  A personal allowance is the amount of money that you can earn, or other income you can receive, before you start to pay income tax.  Once your income goes over £100,000 per annum then the personal allowance begins to be withdrawn.

• The higher rate income tax threshold will rise from £45,000 to £46,350 per annum.

• There is no announcement of corporation tax changes, but from January 2018 the Government will amend the capital gains tax regime for Limited Companies so that it is in line with personal capital gains tax.  For a number of years capital gains by Companies have been assessed under completely different rules from those that apply to individuals, and this simplification is to be welcomed.

• The National Living Wage is to rise from £7.50ph to £7.83ph from April 2018.

• From April 2018, business rates increases will be calculated according to the consumer prices index, and not the retail prices index.  The Government believe that this will be better for business.

• Regarding Property and Construction, the Chancellor will now give local authorities new powers to charge 100% council tax premium on empty properties.  The Government has also committed itself to build in the order of £300,000 housing units per annum.

Unfortunately, it is likely to run into a significant problem with this because following on the financial crisis of 2007 and 2008, many brick making companies either drastically reduced their manufacturing capacities or else went out of business completely.  There are simply not enough bricks being made in the United Kingdom for this promise to be met given current methodologies of constructing properties.

The Government may wish to encourage timber framed or pre-fab construction systems, but those are likely to be unfamiliar to most Construction Companies and will also attract a great deal more scrutiny about possible fire risks.  We therefore think that the prospect of the Government being actually in a position to take the action that is promised on the housing market is not very great.

 

Action Point:

I do not believe there are any action points from this other than to bear in mind that you may have to give an automatic rise in pay to all your employees who are over 25 from next April.

 

Disclaimer:

The matters that I have listed are not intended to be an exhaustive list of what the Government may do on the tax and business front, however I hope you have found them useful planning points.  As always, specific advice from ourselves must be obtained if in doubt and no responsibility is taken for any act or omission on your part on reading this without further advice.

– By Stephen Handley, FCCA

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