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What Was in the 2017 Autumn Budget?

November 23, 2017 Autumn Budget 2017

The 2017 budget promised to invest in technology, provide funding for devolved authorities, business and the NHS, and to continue restoring the public finances.

We have highlighted below the main points;

R&D Expenditure Credit Raised

From 1 January 2018, the rate of tax relief available to large companies that carry out qualifying R&D and claim the research and development expenditure credit (RDEC) will increase from 11% to 12%.

The RDEC is a standalone and above the line credit that is brought into account as a receipt in calculating profits, which allows companies to claim an enhanced corporation tax deduction or payable credit on their R&D costs.

First-time Buyers Receive Stamp Duty Boost

A new relief is to be introduced for first-time buyers within England, Wales and Northern Ireland that will raise the price at which a property becomes liable for stamp duty land tax (SDLT) to £300,000.

Those claiming the relief will pay no SDLT on the first £300,000 of the consideration and 5% on any remainder. No relief will be available for first-time-buyers paying more than £500,000.

The new relief will apply to transactions with an effective date on or after 22 November 2017. However, from 1 April 2018 Wales will assume responsibility for setting its own land transaction tax rates.

Personal Allowance

The tax-free personal allowance will increase from £11,500 to £11,850 from the 6th April 2018

The basic rate tax threshold will increase from £33,500 to £34,500 from the 6th April 2018, this means for most people that the higher rate threshold will increase to £46,350.

National Living Wage and National Minimum Wage

The national living wage will be increased from £7.50 to £7.83 per hour from April 2018 for those 25 and over.

The national minimum wage rates will also increase as follows:

  • Apprentices: £3.70p/hour
  • 16 and 17 year olds: £4.20p/hour
  • 18 to 20 year olds: 5.90p/hour
  • 21 to 24 year olds: £7.38p/hour

Savings and Pensions

The 0% starting rate for savings will be maintained at the current level of £5,000 for 2018/19.

The annual subscription limit for an individual savings account (ISA) remains unchanged at £20,000 for the 2018/19 tax year. The annual subscription limit for junior ISAs and child trust funds will increase from £4,128 to £4,260 from 6 April 2018.

The pension lifetime allowance will increase to £1.03 million for the 2018/19 tax year.

VAT Registration and Deregistration Thresholds

In response to recommendations from the Office of Tax Simplification, the government will consult on the design of the thresholds.

Therefore, the current thresholds will remain until 31 March 2020:

  • a person must be VAT-registered when their taxable turnover in the last 12 months has exceeded £85,000 or is expected to exceed £85,000 in the next 30 days
  • a person does not need to register if the above limit has been exceeded, but they do not expect to exceed £83,000 in the next 12 months
  • a person may apply for deregistration if taxable turnover falls below £83,000 in the preceding 12 months.

There are around 4.4 million businesses with taxable turnover below the registration threshold, although 23% of those have registered voluntarily.

Brexit

The Chancellor has set aside £3bn over the next two years for Brexit preparations and stands ready to allocate further sums if and when needed.

Technology Investment

Investment of £500 million in a range of technological initiatives ranging from artificial intelligence to 5G and fill fibre broadband.

Electric Car Fund

A new £400 million charging infrastructure fund has been created to support electric vehicles, in addition £100 million extra has been allocated through a plug-in-car grant, and £40 million for charging R&D.

Transforming Cities Fund

A new £1.7 billion Transforming Cities Fund gives elected mayors the “fire power” to deliver local priorities. Decisions taken in this Budget also mean £2 billion more for the Scottish Government, £1.2 billion more for the Welsh Government and over £650 million more for a Northern Ireland executive.

Fuel Duty

Cancellation of fuel duty rise for both petrol and diesel which had been scheduled for April.

NHS Funding

An additional commitment of £2.8 billion to the NHS in England, £350 million to be provided immediately to allow trusts to plan for this winter and £1.6 billion in 2018/19, with the balance in 2019/20.