In the Budget speech on Monday 29th October, the Chancellor of the Exchequer, Phillip Hammond, announced several tax proposals.
With the prospect of higher UK growth than previously anticipated and better than expected public finances, he was able to announce tax changes which could benefit financial planning for individuals and business. However, the Chancellor did raise the possibility of an emergency Budget in Spring 2019 ‘if the economic outlook changes materially’ – this could be required if negotiations result in a ‘no deal’ Brexit.
| What does the Budget mean for you |
Personal Allowance
The manifesto pledge to increase this to £12,500 is being introduced a year early and will apply from April 2019. This allowance is tapered for those who earn over £100,000.
Higher rate tax threshold
The higher rate threshold will increase to £50,000 in England and Wales from April 2019. The income tax rates and bands for Scottish taxpayers will be announced on 12 December.
Capital Gains Tax
2019/20 will see the Capital Gains Tax annual exemption increase to £12,000 for individuals and personal representatives and £6,000 for trustees of settlements.
Inheritance Tax
The IHT ‘residence nil rate band’ increases from £125,000 to £150,000 from April 2019.
Taxation for pensions
The Lifetime Allowance will increase to £1,055,000 from April 2019. Despite widespread speculation pre-Budget, no further changes to pension taxation have been announced and the annual allowance remains at £40,000.
Tax on savings
The ISA limit for 2019/20 is unchanged at £20,000. The Junior ISA limit increases to £4,368 and the £5,000 starting rate for savings is unchanged.
Ban on cold calls
To help protect people from fraudsters, the Government will shortly be implementing legislation to make pension cold calling illegal.
Property
First time buyers purchasing a shared ownership property will benefit from the cancellation of stamp duty on properties up to the value of £500,000. This will be retrospective, ensuring first-time buyers who have made a purchase since last year’s Budget will also benefit.
| What does the Budget mean for business? |
National Living Wage
The minimum level increases by 4.9% from £7.83 to £8.21 per hour from April 2019.
VAT threshold
Frozen for small businesses at £85,000 for the next two years.
Changes to off payroll working
Following reform to public sector rules, similar measures are being introduced for the private sector from April 2020. This will move the responsibility for deciding whether workers are treated as employees or consultants to the employer. This has potentially significant tax implications for employers with wider requirements such as the need to provide a workplace pension.
Cut in high street business rates
For retail properties with a rateable value below £51,000 the government is cutting business rates by one third for two years from April 2019, subject to state aid limits.
Enterpreneur’s relief
The minimum holding period to qualify for entrepreneur’s relief has been extended from 12 months to two years.
If you want to discuss how these tax changes may impact you, your business or your family, please contact your Origen Adviser.
This article is for information only and is not to be taken as Financial Advice.
CA3024 Exp. 04/19
