The chancellor, Philip Hammond presented his Autumn 2017 Budget on 22 November 2017. This summary covers his key new tax announcements.

Finance Bill 2017-18 was published on 1 December 2017.

You can follow developments and consultations published in the 2017-18 tax year in our Finance Act 2017: tax update and rolling planner

2018-19 tax year and later in our Finance Act 2018: tax update and rolling planner.


Income tax

Personal allowances

From April 2018:

  • Personal allowance rises to £11,850
  • Higher rate threshold to rise to £46,350.

Marriage Allowance

From 29 November 2017:

  • Claims are to be permitted on behalf of a deceased taxpayer; these can be backdated up to four years.
  • See Marriage Allowance

Care relief

From 6 April 2017:

  • Qualifying care relief to be extended to Shared Lives care funded by the individual.

Self employed

Work related training

  • A consultation will consider extending tax relief for work related training (the same measure is also being considered for employees).

Profit fragmentation

From 2018:

  • A consultation on the best way to prevent UK traders or professionals from avoiding UK tax by fragmenting their UK income between unrelated entities.

Disguised remuneration: tax schemes

  • Measures included in Finance Bill 2017-18 will require all self-employed individuals, who have received a disguised remuneration loan to provide information to HMRC by 1 October 2019.
  • See Disguised Remuneration

Making Tax Digital

  • The scope of MTD will not be widened until it has been shown to work.
  • VAT registered businesses will be mandated into MTD from April 2019 (as planned).
  • Late filing will move to a points based system: it is unclear whether this will apply to VAT.
  • See Making Tax Digital

National Insurance

  • NIC reform delayed one year until April 2019.
  • No Class 4 NIC increases (as previously announced).
  • See National Insurance: rates 

Partnerships

 Finance Bill 2017-18 will provide that from April 2018:

  • Profits and losses are to be allocated in accordance with how the accounts profits and losses are allocated
  • Administration requirements for investment partnerships with overseas partners will be simplified.
  • See Partnerships: changes to tax rules since 2013/14

Companies

Company tax rates
No change to the rates already announced:

Capital gains

  • The indexation allowance will be frozen at 31 December 2017 rates for disposals on and after 1 January 2018.
  • Non-resident companies currently subject to CGT on the disposal of UK residential property will move into corporation tax from April 2019.
  • Non-resident companies will be subject to corporation tax on gains made on the disposal of UK immovable property from April 2019.
  • See Non-resident landlords and CGT: different ways to tax UK property.

Depreciatory transactions

From 22 November 2017:

  • The 6 year time limit within which companies must adjust for depreciatory transactions that have reduced the value of shares being disposed of in a group company is removed.
  • See Depreciatory transactions

Intangibles

From 22 November 2017:

  • A licence granted between a company and a related party in respect of intellectual property must be granted at market value.
  • Where a company disposes of intangible assets and the consideration is something other than cash, the disposal value for accounting and therefore tax purposes must be the market value of the non cash consideration.
  • In 2018 there will be a consultation into the taxation of intangible fixed assets.
  • See Goodwill and intangibles

Phoenixing

  • A discussion document to be published in 2018 looking at additional measures to deal with “phoenixing” and those who deliberately abuse the insolvency regime to avoid or evade their tax liabilities.

Digitalisation and tax

  • The government will publish a position paper on taxing digital platforms.

Close companies & disguised remuneration

From 22 November 2017:

  • New provisions to clarify the scope of the interaction between Part 7A and other tax charges and ensure that tax charges apply regardless of whether the amount contributed to the scheme should previously have been taxed as employment income.

From 6 April 2018:

  • The close company gateway will be introduced to ensure that the disguised remuneration rules apply to participators in close companies.

From Royal Assent of Finance Bill 2017-18:

  • Where there is a loan charge (from 6 April 2019) under the disguised remuneration rules and it cannot be collected under PAYE because the employer is offshore, the liability for the tax will fall on the employee.
  • Measures included in Finance Bill 2017-18 will require all employees, and self-employed individuals, who have received a disguised remuneration loan to provide information to HMRC by 1 October 2019.
  • See Disguised Remuneration 

Disincorporation relief

  • Following consultation, Disincorporation Relief will not be extended beyond its current 31 March 2018 expiry date. 

Corporate interest restriction

  • Finance Bill 2017-18 and Finance Bill 2018-19 will make technical amendments to the corporate interest restriction rules to ensure the regime works as intended.
  • Certain of these amendments are treated as having effect on and after 1 April 2017.

Cotax: Creative Industries & R &D

  • The research and development expenditure credit (RDEC) for qualifying R&D will increase from 11% to 12% for expenditure incurred on or after 1 January 2018.
  • See R&D: Large Company Scheme (RDEC) Guide

Accounting changes for leasing

Two consultations published on 1 December 2017 will consider:

  • The legislative changes required by IFRS16 to ensure that the income and corporation tax rules for leased plant and machinery continue to work as they do currently, and the wider impact of the accounting change for income and corporation tax;
  • The options for the corporation tax treatment of lease payments under the new corporate interest restriction rules.

EIS

  • A new consultation will propose that new knowledge intensive EIS structure with longer period to deploy capital.

From 6 April 2018:

For investments made on and after 1 December 2017:

  • All risk finance investments, whenever made, will count towards the lifetime funding limits for companies receiving investments under the EIS and VCT scheme. The current rules exclude certain investments made before 2012. This measure is subject to normal state aid rules.

Social Investment Tax Relief

  • A new consultation will consider an accreditation system to permit investment in care homes under SITR. A minimum proportion of Local Authority funded beds will be required.

Non-resident companies and international

Substantial shareholding exemption and reorganisations

From 22 November 2017:

  • A change is made to s140 TCGA 1992 to ensure that a corporate reconstruction involving an exchange of shares in an overseas company that previously received the trade and assets of a branch of a UK company does not end the postponement of a tax liability because of the priority of the SSE over the usual treatment of share exchanges.

Royalties

From April 2019:

  • Following a consultation, withholding tax will be extended to royalty payments, and payments for certain other rights, made to low or no tax jurisdictions in connection with sales to UK customers.

Non-resident companies

From April 2020:

  • Income that non-resident companies receive from UK property will be chargeable to corporation tax rather than income tax.
  • From April 2019 gains arising to non-resident companies on the disposal of UK residential property will be charged to corporation tax rather than CGT. All gains on the disposal of UK property (residential and non-residential are subject to tax)

Double tax relief

From 22 November 2017:

  • A restriction in foreign tax relief to prevent overseas branches obtaining double taxation relief for losses.

From the date of Royal Assent of Finance (No 2) Act 2017:

  • Double tax powers under the BEPS arrangements are implemented.

Employment taxes 

IR35 and personal service companies

  • New Consultation taking in HMRC's internal research findings will be published with a view to extending public sector rules to private sector.
  • The government will make a response to the 2017 Taylor Review of Modern Working Practices.
  • Further updates will be included in our PSC and tax guide.

Tax relief on employee training expenses

  • A consultation will consider extending relief for work related training paid for by the employee

Company cars and fuel

From April 2018:

Accommodation and subsistence

From April 2019:

  • Use of benchmark scale rates will be placed on a statutory footing.
  • The employer will no longer need to check receipts where the scale rates have been used.
  • HMRC aims to work with employer stakeholders to improve guidance and claims process for subsistence.

New property exemption for Armed Forces

From Royal Assent of Finance Bill 2017/18:

  • Allowances provided to armed forces personnel to rent or maintain private property to be exempt from income tax and NIC.
  • See Accommodation Benefit

Termination payments

From 6 April 2018:

NICs Employment Allowance

From 2018:

  • Employers with a history of NICs avoidance through the use of offshore entities will be required to pay up-front security to HMRC.

National Living Wage

  • Will rise to £7.83 per hour from April 2018 for those aged 25 and over.

Carried interest: disguised investment management fees

From 22 November 2017

  • The immediate removal of the transitional commencement provisions for asset managers under the Disguised Investment Management Fee rules
  • This follows the 2016 changes to the taxation of performance linked rewards paid to asset managers who had previously enjoyed their own unique tax regime.

Shares: Save as You Earn

From 6 April 2018:

Employees on parental leave may take a 12 month break (currently 6) from saving into a SAYE scheme.

Tax relief on employer pension contributions or life premiums

From April 2019:

  • Tax relief is to be 'modernised' for employer premiums for life assurance or to overseas pension schemes where an employee nominates an individual or registered charity to be their beneficiary.

Capital Allowances

Enhanced Capital Allowances (ECAs

  • The list of designated energy-saving technologies qualifying for an ECA will be updated through Finance Bill 2017-18.
  • The scheme whereby companies which make a loss which includes all or part of an ECA claim can surrender that loss in exchange for a cash payment and due to run out on 31 March 2018  will be extended until the end of this Parliament. The credit rate for loss making companies surrendering ECA’s will be reduced to two-thirds of the corporation tax rate.

First Year Allowances for zero-emission goods vehicles and gas refuelling equipment

  • Will be extended from 1 April 2018 to March/April 2021.

See Enhanced capital allowances: energy saving plant


Private client

Capital Gains Tax

  • Proposals to introduce a 30 day payment window between a gain arising on  residential property and payment are deferred until April 2020.
  • Non-residents are taxed on gains made on UK immovable property from April 2019.

Income, Claims and Investment reliefs

Savings & Pensions

  • No changes to starting rate.
  • Annual subscription limit for Junior ISAs. 
  • See Savings and ISA limits.
  • Pensions lifetime allowance will increase to £1,030,000 from 6 April 2018.

Trusts & Estates

Trusts

  • A new consultation is proposed on how to make trust tax simpler, fairer and more transparent.

Land & Property

Rent a room relief

  • Budget 2017 announced a consultation on rent a room, this did not happen. Autumn Budget 2017 proposes a call for evidence with a view to restrict to longer term lets.
  • See Rent a Room Relief

Property income

From 6 April 2017

  • Individual landlords (excluding mixed partnerships) are able to used fixed mileage allowances.
  • Transitional provisions apply to landlords who had previously used the Extra Statutory Concession.
  • See Property profits & losses.

Stamp Duty and ATED

From 22 November 2017

  • Relief from SDLT higher rate for:
    • Increasing one's share of one's home.
    • Those unable to sell the old property due to Mesher orders etc.
    • People living in properties held in Trust under Court of Protection orders.
  • No SDLT for first time buyers purchasing homes costing up to £300,000.
  • Relief available on first £300,000 for homes costing up to £500,000 in London.

ATED

From 1 April 2018

  • ATED charges to rise 3%, however the maths seem to indicate 2.9%

 


Overseas 

Non-residents' CGT

From April 2019

  • Non-resident CGT extends to all UK immovable property.
  • Non-resident landlord companies become taxed under corporation tax on their gains.

Requirement to notify HMRC of offshore structures

Assessment time-limits: offshore matters

  • A proposal to extending assessment time limits to 12 years for non-deliberate offshore tax non-compliance.
  • Consultation to follow

Overseas companies: see also Companies section


Penalties & Compliance

Late filing/submission

Assumed from April 2019 

  • Reform of late filing penalties: a new points based system will apply.
  • This follows consultation on MTD penalties in Summer 2017.

Assessment time-limits

  • A proposal to extending assessment time limits to 12 years for non-deliberate offshore tax non-compliance.
  • Consultation to follow

Payment via Certificate of Tax Deposit

From 23 November 2017

  • Closure of Certificate of Tax Deposit scheme
  • Existing certificates honoured for 6 years.

Debt collection

  • HMRC will use ‘new technology’ to recover additional SA debts in real time (by coding out debts)
  • Securing debt in solvency: extension of security deposit legislation
    • Expanding existing CIS security deposit legislation to CT
    • Consultation to follow
  • A new taskforce will be formed to collect debt that is more than 9 months old

Digital Platforms

  • A call for evidence on measures to prevent non-compliance

Conditionality: the hidden economy

  • Further consultation on how to make the provision of some public sector licences conditional on proper tax registration

Gift Aid

From April 2019

  • The current three monetary thresholds for donor benefit rules will be reduced to two while all existing extra-statutory concessions will be legislated.

Devolved taxes

  • Finance Bill 2017-18 will include provisions to exempt the Education Authority (Northern Ireland) from corporation tax, The changes will have effect on and after 1 April 2015.
  • See Northern Ireland Corporation tax

VAT

VAT registration threshold

  • No changes to the VAT threshold for two years
  • Making Tax Digital for VAT is due to commence in two year's time.

VAT and vouchers

From TBA (included in Finance Bill 2017-18)

  • A proposal that VAT is accounted for in the same way as any other payment when a voucher is used.

VAT fraud

From 1 October 2019

  • Following consultation, a VAT domestic reverse charge to prevent VAT losses.

VAT refunds

From TBA (included in Finance Bill 2017-18)

  • For UK combined authorities and fire services
  • A grant for Accident Rescue charities to assist them with normally irrecoverable VAT.

Online VAT Fraud

From TBA (included in Finance Bill 2017-18)

  • Online marketplaces will be held jointly and severally liable for VAT not accounted for the unpaid VAT of overseas traders operating via UK or non-UK businesses who sell goods on their platforms
  • Websites proposed to display valid VAT numbers
  • The government will publish a response to its call for evidence ahead of the introduction of a split payment model

Miscellaneous

Pensions

  • Finance Bill 2017-18 will introduce HMRC powers to register and de-register master trust pension schemes and schemes for dormant companies.

Business Rates

  • Pubs with rateable value under £100,000 are eligible for a £1,000 discount; this is to be extended to 31 March 2019
  • The old method of valuing multiple occupancy buildings will be reinstated (retrospectively) from April 2010 (negating “staircase tax”)
  • Following the next scheduled revaluation (2022) VOA revaluations will have to be made every three years

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