Today Philip Hammond delivered a Budget to prepare Britain for a brighter future with a ‘fair, stable and competitive’ tax system. It was a speech light on tax content. I have set out the main highlights below and over the course of the afternoon the Gabelle team will work through the published documents.
Introduced in 2016 as £5,000 this will be reduced to £2,000 from 2018. This measure is aimed at director shareholders.
The abolition of Class 2 NIC will go ahead in April 2018 but this will now be coupled with an increase in Class 4 to 10% in 2018 and 11% in 2019. This is intended to reduce the gap between employed and self-employed.
Making Tax Digital (MTD)
For businesses with turnover below the VAT registration threshold quarterly reporting will be postponed until April 2019. This gives these businesses more time to prepare.
Appropriation of property from fixed assets to trading stock
From today where an individual or a company appropriates a property to stock an election under s 161, TCGA 1992 can only be made where there is a gain. This will prevent the conversion of capital losses to trading losses.
Substantial Shareholding Exemption (SSE)
Legislation will be introduced in Finance Bill 2017 to remove the investing company requirement from the SSE rules. This will increase the number of transactions qualifying for exemption on the sale of shares.
Qualifying Recognised Overseas Pension Scheme (QROPS)
Measures will be published in Finance Bill 2017 (but effective from 9 March 2017 to apply a 25% tax charge on pension transfers to QROPS. There will be some exceptions to the charge but these will be tightly drawn.
As we work through the details we will update our website through the afternoon so keep visiting the site for updates.