AUTUMN BUDGET 2017

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The Chancellor Philip Hammond presented his first Autumn Budget on Wednesday 22 November 2017. Some of the key announcements are set out below.

Property and housing

Mr Hammond promised to use a £44bn package of investment, loans and guarantees to increase the annual number of new homes to 300,000 in the middle of the next decade, from 217,000 last year, aided by planning reforms designed to encourage homebuilders not to sit on permissions already granted.

Stamp duty changes to help home buyers

Stamp duty land tax is to be abolished for first-time buyers purchasing a UK home worth up to £300,000, in a reform that official forecasts said would also trigger a rise in house prices.

Health spending 

The government promised an additional £2.8bn in funding over the next three years, including a tranche of £350m that would be given immediately to allow trusts to plan for winter. A further £1.6bn will be allocated in 2018-19, with the balance in 2019-20. The chancellor presented it as an exceptional move to help the service cope with an ageing population and technological advances.

Income tax allowance

The personal income tax allowance will rise from £11,500 to £11,850 in April 2018, while the threshold at which the higher rate of tax of 40 per cent applies will rise from £45,000 to £46,350. The changes will save the average basic rate taxpayer £1.35 a week.

Pensions

Pension’s tax relief remained unchanged. The Budget also confirmed the lifetime allowance for pensions is to increase to £1.03m from next April.

Minimum wage

Minimum wage increase Britain’s minimum wage workers will receive an inflation-busting pay rise next April, with the hourly rate going from its current £7.50 an hour to £7.83. However, plans to raise the rate for the over-25s to £9 an hour by 2020 has been derailed by the weaker economy.

Motoring

A tax raid on diesel car buyers, estimated to be worth close to £500m, led a suite of measures to encourage motorists to switch to electric vehicles amid efforts to improve Britain’s air quality.

Despite this the chancellor chose to freeze fuel duty again, a popular measure that costs more than £800m a year to support.Bottom of Form.

The Roundhouse Rouleurs complete charity cycle ride.

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Seven friends affectionally known as The Roundhouse Rouleurs successfully rode around Wales in one day to raise money for Ty Gobaith Children’s Hospice. The team members included :

Joni Stubbs-Thrush, Chris Beardmore, Dave Lewis, Chris Owens, Sid Madge, Phil Arundale, David Thornley and Stuart Smith, with Gareth Hughes and Lynden Jones as the support team. The group cycled who cycled from Caernarfon to Chepstow covered 185 miles and 4500 metres of ascent, undertook the challenge recently and raised a fantastic £4,677.84 for the Children’s hospice based just outside Conwy.

Gareth Hughes from the support team says:

“It was a long, wet and gruelling day for the team. However they not only had the satisfaction of completing the ride but raising all this money for Ty Gobaith a very worthy local charity”

Beverley Bradley, Area Fundraiser for Ty Gobaith adds, “We are extremely grateful to the Roundhouse Rouleurs who rode this very tough ride and did it all in a day- without the help from groups like this Ty Gobaith simply wouldn’t exist.”

Auto enrolment minimum contribution increases

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Over time, auto enrolment minimum contributions will increase. The government has set a timetable for these increases and originally the first was scheduled for 1st October 2017. But in 2015, the government announced that this timetable has been pushed back six months and the first increase will now take place on 6 April 2018 with the second on 6 April 2019.

The auto enrolment minimum is initially 2% of which at least 1% must be paid by the employer. Over time this increases to a total of 8% of which at least 3% must be paid by the employer.

These contributions are set on earnings over £113 per week up to an upper limit of £866 per week.  You have the flexibility to pay contributions at a rate that suits your business objectives, subject to these being at least equal to the minimum requirements above.

 

Date Employer minimum contribution Total minimum contribution
Before April 5 2018 1% 2% (including 1% staff contribution)
April 6 2018 – April 5 2019 2% 5% (including 3% staff contribution)
April 6 2019 onwards 3% 8% (including 5% staff contribution)

 

Welcome to the team Anna

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We are delighted to welcome Anna Hughes to our firm. Anna joins us on the 3rd of July 2017 as a trainee accountant and we would like to officially welcome her to the team.

Anna has just finished studying her A levels at Ysgol Aberconwy having studied Maths, Biology and Psychology.  Anna will be studying towards becoming an AAT accounting technician. She will be gaining experience in payroll, accounting and taxation to help us deliver excellent service to all of our clients.

In her spare time Anna enjoys reading and going to live music.

UK born non-doms will suffer under new rules, according to tax advisers

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Members of the Chartered Institute of Taxation (CIOT) have raised concerns about the government’s proposals to reform taxation for non-domiciles, as they fear it could lead to an unfair result for those born in the UK who spend most of their lives abroad, but later return.

A new Treasury consultation document has proposed that individuals born in the UK and classed as UK-domiciled at birth will not be entitled to claim that they are not domiciled for tax purposes while they are living in the UK.

For long-term residents of the UK, this new measure will mean that they can no longer claim to be not domiciled for tax purposes; effectively abolishing the permanency of non-dom status.

The document states: “The government… intends that any individual who is born in the UK and has a UK domicile of origin should not be able to claim non-dom status while they are living in the UK, even if they have left the UK and acquired a domicile of choice in another country.”

According to the CIOT, the introduction of the place of birth element of the rule introduces complexity into an already complex area.

“Among the new proposals, the stricter regime for those born in the UK seems unduly harsh,” said Aparna Nathan, Chair of the CIOT’s capital gains tax and investment income sub-committee. “Attaching such importance to a place of birth, which is clearly outside the individual’s control, and could be a matter of happenstance, is curious.

“As the proposal stands, a UK-born person who returns to the UK to look after ageing relatives or to take up a temporary secondment will become deemed UK domiciled from the first tax year,” Nathan added.

“As a result, they will have to pay UK income tax and capital gains tax on their worldwide income and gains, and UK inheritance tax on their worldwide assets. This seems an unduly onerous consequence of their place of birth combined with what might be a relatively brief period of UK residence later in life.”

The government is expected to release its final legislation on non-dom tax rules in the near future.

Link: Non-Dom Consultation Document

HMRC outlines Benefits in Kind and expenses real time reporting

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PAYE legislation is changing from 5 April 2016, so employers who intend to or are already payrolling benefits and expenses must register with HMRC using the new online Payrolling Benefits in Kind (PBIK) service.

Businesses will be required to align their existing payroll software and register to payroll using the new service. After this date companies will not be able to register for the 2016/ 2017 tax year as HMRC cannot process changes in-year.

In order to avoid being sent multiple tax codes, businesses will also need to register before the annual coding process, which usually starts around 21 December.

In addition, P11D (b) forms must still be completed, including the total benefits and expenses provided, whether or not they have been put through the payroll.

However, if employers payroll car and fuel benefits, they must not complete P46 (Car) forms as they are deducting the tax at source that is due on these benefits.

The only benefits that cannot be payrolled using this new service are:

vouchers and credit cards
living accommodation
interest free and low interest (beneficial) loans
These must still be registered using the P11D form in the usual manner.

Before making the first main relevant payment to an employee in a tax year, businesses need to calculate the cash equivalent of the benefit.

They will then be required to determine the number of payments to be made to the specified employee in the tax year and divide the cash equivalent by the total number of payments to be made.

The resulting amount is the taxable value of benefit, which should be added to the payroll each pay cycle as a notional value. It is then necessary to deduct or repay tax as usual by reference to the employee’s code, even if this is the subject of an objection or appeal.

These changes bring with them an additional burden for businesses and some may need to seek clarification ahead of the change.