Friday, 10 March 2017 16:04

Spring Budget 2017 - The Highlights

Chancellor Philip Hammond presented his Spring Budget to the House of Commons.

BUDGET HIGHLIGHTS

Corporation Tax

Corporation tax rate will be 19% for the financial years beginning 1 April 2018 and 1 April 2019 and 17% for the financial year beginning 1 April 2020.

 

Substantial Shareholding Exemption (SSE)

From 1 April 2017 the SSE rules will be simplified by removing the investing company requirement and providing more comprehensive exemption for companies owned by qualifying institutional investors.

 

Image rights

In spring 2017, the government will publish guidelines for employers who make payments for image rights to their employees in order to improve the clarify of the existing rules.

 

Research and development (R&D)

The administrative changes to R&D tax credits will be made in order to increase the certainty and simplicity around claims.

 

Appropriation to trading stock

Legislation will be introduced to remove the ability for businesses to convert capital losses into trading losses where an asset is appropriated to trading stock.

 

Double Taxation Treaty Passport Scheme

The government will renew and extend the administrative simplifications of the DTTPS to assist foreign lenders and UK borrowers. For overseas lenders, the scheme simplifies access to reduced withholding tax rates on interest that are available within the UK’s tax treaties with another territories. The DTTPS is currently restricted to corporate lenders and corporate UK borrowers but from 6 April 2017 this restriction will be removed and it will apply to all types of overseas lenders and UK borrowers.

 

National Insurance Contributions

Class 2 NI contributions will be abolished from April 2018. Class 4 NI contributions will increase from 9% to 10% with effect from 6 April 2018 and from 10% to 11% with effect from 6 April 2019

 

Dividend allowance reduction

The tax-free dividend allowance will be reduced from £5,000 to £2,000 from 6 April 2018

 

Trading and property income allowances

The government will legislate in Finance Bill 2017 to create two new income tax allowances of £1,000 each for trading and property income. The allowances can be deducted from income instead of actual expenses.

 

Inheritance tax

Under changes announced by the government an additional nil-rate band will be introduced for each individual to enable a family home to be passed wholly or partially tax-free on death to direct descendants. Current “residence nil-rate band” of £325,000 will increase by the following amounts from 6 April 2017

 

2017/2048 - £100,000

2018/2019 - £125,000

2019/2020 - £150,000

2020/20121 – £175,000

 

Business Rates

The government will provide support for small business facing significant increases in bills following the business rates revaluation due to take effect in England from April 2017

 

Salary Sacrifice

The legislation will be introduced in Finance Bill 2017 to remove income tax and employer NICs advantages where benefits-in-kind are provided through salary sacrifice or other optional remuneration arrangements, such measures coming into force from 6 April 2017.

 

Tax-Free Childcare Scheme for working parents

A new scheme will provide up to £2,000 a year in childcare support for each child under 12.

 

 

Contact Kelmer UK Ltd at This email address is being protected from spambots. You need JavaScript enabled to view it. for more information and personalised assistance

 

Related articles

  • Ireland - budget 2018

    The Irish Government announced the Budget 2018 on the 10th of October 2017, with some changes in critical areas like taxation and social welfare.

  • UK market's opportunities for Italian professionals

    Are you an Italian entrepreneur interested in expanding your business to the UK or a business consultant who wants to know more about the UK market’s opportunities?

    Save the date for PRO.MEET 1st London Workshop about internationalization on May 5th 2017.

  • Autumn Statement 2016 summary

    The Chancellor of the Exchequer gave his Autumn Statement to Parliament on 23rd November 2016. There are no new major tax changes and so it is business as usual.