We are delighted to be able to provide you with our summary of the key announcements in the Budget 2018 statement, made on Monday 29 October, which can be accessed by clicking here.
The Chancellor has laid out details signalling the end to austerity in a statement delivered between key meetings in the Brexit negotiations. Following good news from the OBR, which reported borrowing £13 billion lower than forecast in March, some of the pressure was off Mr. Hammond.
Expectation leading up to the Budget had been for tax rises, with various revenue raising options discussed ahead of the statement. Despite this, the headline changes announced by the Chancellor were predominantly good news for taxpayers and businesses:
- The personal allowance will be raised to £12,500 from April 2019, one year earlier than previously planned. At the same time, the higher rate threshold will rise to £50,000, also a year ahead of schedule.
- The annual Capital Gains Tax exempt amount will rise to £12,000 for 2019/20.
- The pension lifetime allowance will increase to £1.055 million for 2019/20, with no change to the annual allowances.
- The annual investment allowance (AIA) will increase to £1 million for all qualifying expenditure on plant and machinery made between 1 January 2019 and 31 December 2020.
- From 29 October 2018 shareholders claiming entrepreneurs’ relief must be entitled to at least 5% of the distributable profits and net assets of a company.
- The minimum period throughout which the qualifying conditions for entrepreneurs’ relief must be met will be extended from 12 months to 24 months from 6 April 2019.
It is worth noting that the draft Scottish Budget will be published on 12 December, which will include details of any changes to income tax rates and thresholds there for 2018/19.
If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the Budget, please call us to discuss them.