The chancellor Philip Hammond announced in his second budget the ‘era of austerity is finally coming to an end but discipline will remain’.
Of course with Brexit on the horizon, plus world economic jitters, whether that statement stands the test of time is uncertain.
The headlines from the budget are:
An increase to your personal allowance to £12,500 plus the higher rate tax threshold is increasing to £50,000, this is now to be implemented from April 2019, a full year earlier than was anticipated. This will mean a basis rate taxpayer will pay less tax and by 2019/20 there will be a million fewer higher rate taxpayers.
Entrepreneurs relief, is extremely useful for entrepreneurs when they are disposing of their business(s). The qualifying ownership period has been extended to two years, from one. There will be transitional rules where the claimants business ceased before 30 Oct 2018.
Annual investment allowance will now be £1,000,000 from January 2019 for two years, the intention is to increase capital investments by companies.
IR35, there rules were changed in the public sector in April 2017. It was widely expected that eventually changes would be made to the private sector. From April 2020, new rules will be introduced into the private sector for medium and large sized business. This should bring parity between IR35 treatments in public and private sectors
Research and Development claims will be restricted to the PAYE paid by the company making the claim. This is to restrict research and development claims by businesses that do not have employees.
VAT registration threshold will be maintained until 2020.
The national living wage will be increased to £8.21 from April 2019, this should benefit over 2 million workers.
Something a bit more lighthearted was announced in the budget, to commemorate Brexit the Royal Mint will be creating a new 50p coin which can be bought from Spring 2019.
The detail on all budget matters is expected to be available in early November.