There was considerable discussion
about how the British Chancellor Philip Hammond would approach the annual UK Budget 2017.
Among many predictions, personal financial commentators focused on possible restrictions on the amounts people could contribute to their pensions, both in the form of the Annual Allowance and possible reduction in tax relief for contributions – Even the ex-Pensions Minister, Steven Webb, indicated that this was likely. A man who, in the words of the poet Sir John Betjeman, is ‘‘A man who really ought to know,for he is paid for saying so.‘‘
Amazingly, none of the predictions came to pass (although we always have to await the small print of the Finance Bill of course) and here is a picture of our Czech-based adviser’s predictions after the Budget:
So, what is likely to be of interest to financial advisers and their clients both in the UK and overseas from Budget 2017 ? We have summarised the points that are most likely to be of interest to individuals and small/medium sized business owners. A fuller list can be found here
Budget 2017 Main Points
Personal taxation and wages
Tax-free personal allowance on income tax to rise to £11,850 in line with inflation in April 2018
Higher-rate tax threshold to increase to £46,350
National Living Wage to rise in April 2018 by 4.4%, from £7.50 an hour to £7.83.
Class 2 National Insurance abolished- now confirmed. Class 4 to increase from 9% to 10% in April 2018 and to 11% in 2019
Government introduces a £3,000 reduction in the tax-free dividend allowance from £5,000 to £2,000.
No change £325,000 threshold remains
Pensions- Annual Allowance and Tax Relief
New Lifetime Allowance confirmed as £1.030,000 for 2018/2019 an increase of £30,000
No other changes.
Capital Gains Tax
No changes mentioned
Stamp duty and Housing
Reduction of upfront costs for first-time buyers by removing SDLT on properties up to £300,000 nationally and for London and the South East, the first £300,000 of properties worth up to £500,000years to support house-building
Target of building 300,000 homes annually to be met “by the mid-2020s”
£630 million ‘small sites fund’
Homes left empty could be hit by a 100% council tax premium under powers to be handed to councils
Tobacco and Alcohol
Tobacco escalator to continue at inflation +2%, with additional 1% on hand rolling tobacco
Minimum excise duty will also rise
Duty on low cost, high strength alcohol – like white ciders – will increase at rate to be confirmed
Duties on other ciders, wines, spirits and beer frozen
Driverless cars on the road by 2021
Fuel duty frozen for seventh year in a row
No change to £85,000 VAT threshold – this is how much turnover firms must make before they must register for VAT. This will net the Treasury £170m a year by 2022/23
Business rates uprating measure to switch from RPI to CPI inflation, which is lower, two years earlier in April 2018. This will cost the Treasury £530m a year by 2019/20
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
This article was published on 22nd November 2017
- Budget 2015
- Pension information in the 2016 budget – Knowing your LISAs from your ISAPs
- Pension lifetime allowance
- April 2017 Investment Returns
- Lifetime Allowance 5 Key Facts
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