Peters & CO: Spring Budget 2017

Key rates

• Corporation tax – 19% from 2017, 17% from 2020
• Income tax – basic rates 20%, higher rate 40% (£45,000 from 2017 & £50,000 by 2020), additional rate 45%
• Dividend rat rate – basic rate taxpayers 7.5%, higher rate taxpayers 32.5% and additional rate taxpayers 38.1%
• Personal allowance – £11,500 from 2017, £12,500 by 2020
• Capital gains tax (excluding residential property) – basic rate taxpayers 10%, higher and additional rate taxpayers 20%

 Businesses   

 -Making Tax Digital (MTD) to commence as planned from April 2018 with a 12-month delay for unincorporated businesses and landlords under the VAT threshold.

-Business rate reliefs announced including a relief fund for local authorities as well as reliefs for SMEs.

-Further modification of the draft legislation regarding the tax deductibility of interest to apply from 1 April 2017.

-Legislation introduced to prevent conversion of capital losses into trading losses on appropriations to stock.

 Employers  

-NIC employment allowance – Government may take action to ensure this allowance is not used for avoidance purposes.

-Call for evidence on the valuation of benefits in kind to published.

-Increase in the National Living Wage to £7.50 for workers aged 25 and over from 1 April 2017.

-The rules on off-payroll woring in the public sector will be reformed from 6 April 2017. The responsibility for determining whether IR35 applies will be moved to the public body or agency paying the worker’s company.

Individual  

-Increase in the main rate of Class 4 NICs to 10% from 6 April 2018 and 11% from 6 April 2019, partially offset by the abolition of Class 2 NICs from 6 April 2018.

-Reduction in dividend allowance from £5,000 to £2,000 from 6 April 2018

-Tax rules for non-UK domiciled individuals to go ahead from 6 April 2017

For more information click on Peters & Co Spring Budget 2017