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Blog Autumn Budget 2017

Autumn Budget 2017


23 November 2017

Introduction

Chancellor Philip Hammond said he’d take a “balanced approach” to his second Budget of 2017.

Once again the speech was light on headline-grabbing finance changes and there were no ‘giveaways’ or major surprises.

Instead, the chancellor focused on measures to prepare the economy for post-Brexit life.

Raising productivity is key to boosting economic growth and wages, but growth has “remained stubbornly flat” and continues to be an issue.

In light of this, the Office for Budget Responsibility revised down its forecasts for growth.

It expects GDP to grow by 1.5% in 2017 (down from 2% predicted at the Spring Budget in March) and 1.4% in 2018 (down from 1.6%).

To help address the problem, the National Productivity Investment Fund, which supports innovation and infrastructure, will be extended by a year and expanded to more than £31bn.

The chancellor also announced a range of investments, including:

  • £3bn over 2 years to prepare for Brexit
  • £30m to develop digital skills distance learning courses
  • funding to support building 300,000 new homes a year by the mid-2020s.

Significant announcements for businesses include the VAT thresholds remaining unchanged for 2 years, while business rates will increase using the CPI measure of inflation from April 2018.

For individuals, stamp duty has been abolished for most first-time buyers while increases to the personal allowance and the national living and minimum wage will be welcomed by many.

This report summarises the announcements made by Hammond during Autumn Budget 2017 on 22 November 2017.

However, these are subject to change following the Finance Bill and the Spring Statement.

At a glance

Business

Business rates – Increases to be determined by CPI, not RPI, from April 2018
Staircase tax – Businesses can have their original bill reinstated and backdated
R&D expenditure credits – R&D expenditure credit rises to 12% from 1 January 2018

Infrastructure finance

Devolution deals – Second devolution deal for the West Midlands
Regional transport – 6 metro mayors to share half of £1.7bn transport fund

Personal

Personal allowance – Basic rate threshold rises to £11,850, higher rate up to £46,350
National living wage – Increase of 4.4% brings NLW to £7.83 an hour for over-25s
Pension lifetime allowance – To rise to £1.03m for 2018/19 tax year

VAT

Threshold frozen – Threshold to remain at £85,000 for 2 years from April 2018
Anti-fraud measure – All online marketplaces are jointly and severally liable for unpaid VAT of their sellers
Regional refunds – Police and fire services in Scotland eligible for VAT refunds

Duties

Stamp duty – Abolished for first-time buyers on all homes worth up to £300,000
Diesel cars – Tax for diesel cars that fail to meet latest standards rise a band
Cigarettes and alcohol – Tobacco rises by 2% above RPI; ‘white ciders’ face new duty

Other

EIS – Investment limit to double to £2m for knowledge-led companies
Capital gains indexation allowance – Indexation no longer calculated up to month of disposal
Company van benefit – To be increased from £3,230 to £3,350 from 6 April 2018

Download our free Budget Booklet to look at each section in more detail and get in touch by clicking here or by telephone to 01206 266692 if you have any queries

The blog was written by Lee Taylor

Proactive accountant helping business owners make more profits, pay less tax and build more successful businesses.

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