News from the Autumn Budget
Chancellor Philip Hammond presented his first Autumn Budget on 22nd November 2017. Here we share some of the outcomes that we will see impact on our clients.
A reminder that the Corporation Tax rate reduced from 20% to 19% from April 2017. The further cut to 17% from April 2020 is still currently to go ahead as planned. As previously announced with Corporation Tax loss relief, trading losses incurred from 1st April 2017 will be able to be offset against any income in later years for the company or another group member (previously they could only be offset against profits from the same trade when carried forward to later years).
Research and Development tax credits
For expenditure incurred on or after 1st January 2018, companies operating the Research and Development Expenditure Credit (RDEC), also known as the “Above The Line Credit”, will benefit from an increase in the rate of this credit from 11% to 12%.
A surprise announcement was that from 1st January 2018, Indexation Allowance will be frozen for limited companies.
National Insurance for employees and employers
The earnings threshold for both employees and employers will increase from its current level of £157 per week to £162 per week from April 2018. The Upper Earnings Limit will rise from £866 to £892 per week.
National Minimum Wage/National Living Wage
There will be a rise in the National Living Wage from £7.50 to £7.83 per hour for over 25s from April 2018. There are also to be increases in the National Minimum Wage from 1st April 2018 to £7.38 per hour for 21-25 year olds (from £7.05), £5.90 per hour for 18-20 year olds (from £5.60), £4.20 per hour for 16-17 year olds (from £4.05) and an increase in the apprentice rate from £3.50 to £3.70 per hour.
Making Tax Digital (MTD)
It was confirmed that MTD will be introduced from April 2019 for VAT.
Income tax rates and allowances
The current personal allowance of £11,500 is to rise to £11,850 from 6th April 2018. Furthermore, the basic rate band for 2018/19 is to be £34,500 (currently £32,000).
Car benefit in kind
From April 2018, the surcharge in calculating a benefit in kind for a diesel car will rise from 3% to 4% with the maximum percentage to be used remaining at 37% of the list price of the car.
There was also confirmation of many previous Budget announcements that are now taking affect. This is only a snippet of the full budget report that can be read by clicking here.
Future Budgets: As announced, in future the Budget will be made in the Autumn. There will still be a Spring Statement from 2018 onwards, but this will not normally contain any significant tax and spending policy decisions.
Self Assessment 16/17 Deadline
A reminder that your Self Assessment return for the last tax year 6th April 2016 to 5th April 2017 is now due and the online filing deadline is 31st January 2018.
This is also the deadline date for making your payment for any tax due from this return.
If you are calculating the payment due prior to a formal notification from HMRC, then don’t forget that an additional payment on account for the next tax year may be applicable.
You can find out about the ways to pay and all the details by clicking here.
If you are running out of time for completing you 2016/17 return, then do not hesitate to contact us as soon as possible.
Self Assessment 17/18 – coming soon!
Not long now, and from 5th April 2018, you will be required to start completing your Self Assessment Tax Return for the tax year 2017/18.
You will again have until January to complete your return, but I am sure you also found that the year passes very quickly.
In advance of the tax year end, we recommend that you start to prepare your financial records and collate the information required in readiness for the completion of your return. If you would like to know what to collate, then please feel free to call us.
From our experience of working with many construction industry clients, if you are having your tax deduced via the Construction Industry Scheme at the Higher Rate, then it is very likely that you will be due a tax refund. File your return quickly and get your hard earned cash back in your bank account.
If you would like support completing your Self Assessment Tax Returns, then please call us and we have happy to discuss how we can help with no obligation.
May all the team at HCA wish you a Merry Christmas and a Happy New Year with our best wishes for 2018.