Did you know that a chancellor is allowed to drink whatever they want while making their Budget speech to Parliament – the only time that alcohol is permitted there? Disraeli had a brandy, Gladstone had a sherry, even Kenneth Clarke had a whisky. Philip Hammond’s choice of water complemented his low-key Autumn Budget perfectly.
None of the rumoured items of interest to those in accounting and their clients materialised. There was no roll out of the public sector IR35 reforms, no reduction in the VAT threshold, no stamp duty increase and no dividend tax changes.
From an individual’s perspective, for accountants and non-accountants alike, there was some interesting news. With recent reports showing that financial worries are a key factor impacting employees’ productivity, helping to reduce those worries should therefore increase productivity, so the Budget included:
- The immediate abolition of stamp duty for first-time buyers on homes worth under £300,000
- An increase in personal tax allowance and the raising of the higher tax rate threshold
- An increase in the National Living Wage and National Minimum Wage
- A new rail savings card for 26-30 year olds to help with commuting costs
As well as the headline-grabbing incentives for individuals, there were a number of changes that will affect companies, many of which will be of interest to accountants.
- The 2020 corporation tax reduction to 17% is to be retained
- To encourage innovation and investment in the UK there is an extension to R&D tax credits for large companies
- The VAT threshold has been frozen for 2 years, possibly to coincide with Making Tax Digital going live
- Non-resident corporate landlords will become subject to a low-rate corporation tax
- Business rates revaluations will take place every 3 years, as opposed to every 5, beginning after the next one
With a number of items under review and subject to further discussion, probably to minimise objections and hold-ups, there was not too much to raise a glass (of water) to.