VAT Threshold
- HMRC have looked at a way to reform the VAT threshold, in order to make it smoother for small businesses when registering instead of a cliff-edge. No change will be made to the current VAT threshold of £85,000 until April 2022, but will be actively monitored once we've left the EU.
IR35
- The off-payroll (IR35) public sector rules will be brought in for the private sector, however, these won't be introduced until April 2020 following the advice of the consultation to give people and businesses more time to prepare. HMRC will provide support and guidance to medium and large companies to implement the changes. Small companies will be exempt from these changes, however as our CEO Luke Desmond comments, we are 'yet to see any official definition of a small company for this purpose, so let's wait and see on this front.' You can read Luke's full take on the current IR35 situation on the blog here.
Other Announcements
- Personal
- An increase of the personal allowance from £11,850 (April 2018) to £12,500 in April 2019),
- Higher rate threshold increasing from £46,350 (April 2018) to £50,000 in April 2019, a year earlier than originally planned in the manifesto. These thresholds will remain at the same level for 2020-21.
- Scottish taxpayers have different tax rates and thresholds. The Scottish government will provide its draft budget for Scottish taxpayers on 12th December 2019.
- The ISA annual subscription limit for 2019-20 remain unchanged at £20,000.
- National Living Wage (NLW) will increase from £7.83 to £8.21 for those aged 25 and over in April 2019, with the NMW rising above inflation too.
- Fuel duty was frozen for the 9th year in a row.
- Lettings relief will be limited to properties where the owner has a shared occupancy with the tenant.
- Universal credits 'here to stay', Universal Credit Work Allowances increased by £1,000.
- Business Tax
- HMRC are still committed to cutting Corporation Tax to 17% in 2020, with it currently sitting at 19%, the lowest in the G20.
- As part of the vision of longer-term growth for the economy, particularly in the science and innovation, a further £1.6 billion will be allocated for R&D funding.
- New 2% digital services tax for big technology companies.
- Private finance initiative (PFI) contracts won't be used in the future.
- Saving the high street, business rates to be cut by up to a third for up to 90% of all retail properties such as independent shops, pub and restaurants.
- The minimum qualifying period that conditions must be met in order to claim Entrepreneur's Relief has been extended from 12 months to 24 months.
- The Economy
- The growth forecast has been downgraded from 1.5% to 1.3%.
- However, growth forecast for 2019 has been raised from 1.3% to 1.6%, with annual forecasts raised for the next 4 years.
- 3.3 million more people are in work since 2010, with 800,000 more jobs forecast by 2022.
- Wage growth has been at its highest in nearly a decade.
- Spring Statement 2019 might be upgraded to a full budget if needed.
- An additional £500m given to government departments as part of the preparation for exiting the EU, bringing the total government investment in EU exit preparations to over £4bn since 2016
A budget meant for the hardworking families, those far away from the twist and turns in Westminster, for the strivers, grafters and carers, those who are the backbone of the community. Thanks to the strength and spirit of such hardworking British people pulling together, this budget aims to drive an economy that works for everyone.
Avoiding the headlines such as 'Hammo House of Horrors' of a Budget on Halloween, Fiscal Phil delivered a budget trying to prepare for the challenges ahead in uncertain times, where embracing change and not hiding from it will be needed. The Chancellor ended his speech with an extension to his favoured catchphrase of the afternoon, 'austerity is coming to an end but discipline will remain'.
