Well what a fortnight of contrasts.
I left the UK nearly a fortnight ago to sail (well, not exactly sail but cruise on a coastal ferry) up the Norwegian coast round to the Russian border and back again. Since then we have had the American Mid-Term elections, when Trump managed to lose control of the House of Representatives but still win a “massive” victory (fake news?), the Brexit talks have continued but I have managed to avoid any news (fake or otherwise) about those, I have been to the Arctic Circle, seen the Northern Lights three times and am writing this whilst sailing (well actually cruising) towards Bergen to catch my flight home.
And we have had a budget!
So what happened in the budget? Well not too much actually that will affect small businesses and individuals.
Firstly, there was speculation that VAT thresholds would be reduced substantially. Well, that didn’t happen, but they are not going up either. They are being frozen at the current level.
Secondly, the increase in the income tax personal allowance to £12,500 and the increase in the 40% threshold to £50,000 which was originally going to happen in April 2020 has been brought forward by one year to next April (2019). The upper earnings threshold for National Insurance, however, has been substantially increased to bring it into line with the 40% income tax threshold. The self-employed stamp (Class 2), originally due to be abolished, will continue. This may actually be good news if your self-employed earnings are very low and you have no other NIC liabilities.
Thirdly, many people have taken advantage of R & D credits to reduce their tax liabilities. Whilst these are continuing, they will be subject to a new cap.
Fourthly, the exemption from Capital Gains Tax on selling your own home is being attacked in two ways. Firstly, the final period of ownership is exempt even if you have moved out subject to a time limit. Originally 36 months, this was reduced to 18 months in 2014, and is now to be reduced further to 9 months. Secondly, lettings relief is being severely curtailed and will only apply to periods when the owner “shares” occupation with a tenant.
There are a number of other changes that will affect larger businesses and wealthier individuals. I am pleased, however, with one measure that has not changed. Having suffered two weeks of Norwegian prices for alcohol, basically £10 for a pint of beer and £50 (yes £50) for a bottle of supermarket wine, I am pleased to see that duties on beers, wines and spirits remain unchanged. I am looking forward with great anticipation to my first glass of wine when I get home.
WatkinsonBlack have considerable experience in all areas of taxation and businesss services, including providing a very cost-effective payroll bureau service. If you want to arrange a no-obligation initial meeting on any taxation or accounting matter then please contact us. Please note that these ideas are intended to inform rather than advise and you should always obtain professional advice before taking any action.