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2018 Autumn Budget Highlights

30 October 2018 • HMRC News

Here is a review of the headline announcements together with a reminder of the measures coming into force from October and November 2018, January and April 2019, and beyond.

Measures introduced immediately

Capital gains tax: tackling misuse of Entrepreneurs’ Relief

In addition to the current requirements on share capital and voting rights, from 29 October 2018 shareholders must also be entitled to at least 5% of the distributable profits and net assets of a company to claim the relief.

Stamp Duty Land Tax (SDLT) and first-time buyer’s relief

First-time buyers relief will be extended in England and Northern Ireland so that all qualifying shared ownership property purchasers can benefit, whether or not the purchaser elects to pay SDLT on the market value of the property.

This change will apply to relevant transactions with an effective date on or after 29 October 2018, and will also be backdated to 22 November 2017 so that those eligible who have not previously claimed first-time buyers relief will be able to amend their return to claim a refund.

Structures and buildings allowance (SBA)

New non-residential structures and buildings will be eligible for a 2% capital allowance where all the contracts for the physical construction works are entered into on or after 29 October 2018.

Intangible fixed assets regime

With effect from 7 November 2018, the de-grouping charge rules, which apply when a group sells a company that owns intangibles, will be reformed so that they align more closely with the equivalent rules elsewhere in the tax code.

Measures introduced from 1 January 2019

Annual Investment Allowance (AIA)

The Annual Investment Allowance will increase to £1 million for all qualifying investment in plant and machinery made between 1 January 2019 and 31 December 2020.

Measures introduced from April 2019

Personal Allowance and Higher Rate Threshold

From April 2019, the personal allowance will increase from £11,850 to £12,500 and the higher rate threshold will be extended from £46,350 to £50,000. These will remain at the same levels for 2020-2021 and then increase in line with the Consumer Price Index.

Entrepreneurs’ Relief: minimum qualifying period

From April 2019, the minimum period throughout which the qualifying conditions for relief must be met will be extended from 12 months to 24 months.

Capital allowances special rate reduction

From April 2019, the capital allowances special rate for qualifying plant and machinery assets will be reduced from 8% to 6% to more closely match average accounts depreciation

Pensions and Savings

The lifetime allowance for pension savings will increase in line with the Consumer Price Index, rising to £1,055,000.

The annual subscription limit will be uprated in line with Consumer Price Index to £4,368 for both Junior ISAs and Child Trust Funds.

Offshore receipts in respect of intangible property (previously Royalties Withholding Tax)

From April 2019, legislation will be introduced to tax income from intangible property held in low-tax jurisdictions to the extent that it is referable to UK sales.

In the future

Corporation tax

The government confirmed that corporation tax will be further reduced to 17% from April 2020.

VAT registration threshold

The VAT threshold will be maintained at £85,000 until April 2022.

Capital gains tax

From April 2020, lettings relief will be reformed so that it only applies where the owner of the property is in shared occupancy with the tenant.

The final period exemption will also be reduced from 18 months to 9 months.

Off-payroll working in the private sector

From April 2020, responsibility for operating the off-payroll working rules will move from individuals to the organisation engaging the worker. Small organisations will be exempt.

Preventing abuse of R&D tax relief for small and medium-sized enterprises (SMEs)

From April 2020, the amount of payable R&D tax credit that a qualifying loss-making company can receive in any tax year will be restricted to three times the company’s total PAYE and NICs liability for that year.

Employment Allowance

From April 2020, the employment allowance will be restricted to employers with National Insurance Contributions below £100,000 in their previous tax year. Only larger companies will be affected.

Consultation on SDLT charge for non-residents

The government will publish a consultation in January 2019 on a SDLT surcharge of 1% for non-residents buying residential property in England and Northern Ireland.

If you would like to explore what the Autumn Budget could mean for you and your business, please call 020 7731 6163 to talk to one of our tax team. 

Warrener Stewart go messing about on the river

08 October 2018 • Warrener Stewart News

Already an excellent team of accountants and tax advisors, several members of Warrener Stewart put their team skills to the test recently when they took the oars of a Cornish Pilot Gig.

The 32-foot-long wooden, six-oared boats are traditionally used along the Cornish coast as pilots and lifeboats. The Fulham accountancy practice got to row a more local version based on the River Thames at Richmond with London's first Cornish Pilot Gig rowing club.

Under the strict, but gentle supervision of a former colleague, a founder member of the club, and her fellow clubmates, the novice rowers had to learn quickly to row these sturdy vessels. They travelled upstream against the tide to relative safety at Eel Pie Island, Twickenham, before the strong running current took them rapidly in the opposite direction!.

“The technique of rowing the Gig was fairly straight forward,” commented Damian, who when trying not to rock the boat heads up Warrener Stewart’s American tax department.

“You do need a little confidence to get on board and be willing to excerpt some energy and get a little muddy. It takes time to get going, but once we had settled down and learnt the relevant techniques it was a real joy to row.”

Having rowed a mile or two upstream from Richmond Bridge, the team stopped (a little too long!) to take on water at a conveniently situated riverside hostelry, before having navigate their way back just as the sun was setting! 

“It was a great team bonding experience that everyone enjoyed.” concluded joint managing director, Nick Morgan.  “It’s certainly much easier rowing with the tide!”

“For the past 20 years Warrener Stewart has consistently given good advice... going above and beyond their remit.”
Theo Brehony - London Preparatory School Limited