2018 Budget Summary

A very brief summary of the some of the major points from the budget that we think will be of most interest to our clients. If you have any further questions about any of these changes please give us a call. We will put more details on some of these points on our site over the next couple of weeks.

Personal tax 
The personal allowances will be increased to £12,500 from April 2019. However the increase to the basic rate band where individuals start paying 40% tax doesn’t apply to Scotland.

Entrepreneurs’ relief 
Despite the pre-budget speculation, entrepreneurs’ relief will continue. However, the qualifying ownership period has been extended from 12 months to two years. Transitional rules will apply where the claimant’s business ceased before 30 October 2018.

Annual investment allowance
Businesses will now enjoy a higher AIA of £1,000,000 for the two years beginning January 2019, this should encourage capital investment.

Research and development
Refunds arising from research and development claims will be restricted to the PAYE paid by the company. This will restrict the benefit of R&D claims by companies that do not have employees.

IR35
The new IR35 rules will not be introduced to the private sector until April 2020 and it will only affect large and medium sized businesses. This will bring the private sector into line with the current public sectors rules.

Property tax
The main residence relief will be restricted. The final qualifying period of ownership will be reduced to nine months.

VAT
The VAT registration threshold will be maintained until 2022.