Income tax: the personal allowance threshold, the rate at which people start paying income tax at 20 per cent, is to rise from GBP11,850 to GBP12,500 in April 2019. The higher rate income tax threshold, the point at which people start paying tax at 40 per cent, is to rise from GBP46,350 to GBP50,000 in April. Subsequently, the two rates will rise in line with inflation.
Entrepreneurs’ relief: changes to the qualifying terms. Disposals of shares only qualify where the shares entitle the holder to 5 per cent of any dividends and 5 per cent of assets on a winding up. In addition, for disposals after 6 April 2019, assets will need to have been held for a period of two years (rather than one year).
Principal private residence relief: the period of deemed occupation at the end of a period of ownership is being reduced from 18 months to nine months with a withdrawal of the rental relief element in all circumstances, except where the owner co-occupies with the tenant. The principle that the relief should apply to all properties was reaffirmed.
Capital gains tax: lettings relief is to be limited to where the owner is in shared accommodation.
Small trading tax exemptions for charities: raising the exemption upper limits from GBP5,000 and GBP50,000 to GBP8,000 and GBP80,000 respectively.
Gift aid donor benefits: simplifying the limits on benefits that charities can give to their donors to acknowledge donations.
Gift aid small donations scheme: increasing the small donations limit using cash or contactless payments from GBP20 to GBP30.
Retail gift aid scheme: relaxing the requirement to issue annual letters. Charities will now only need to issue letters once every three years, rather than every year where a donor’s total donations in a given year are less than GBP20.
The budget Red Book referred to the government’s trusts consultation, but the consultation date has not yet been confirmed:
3.15 Trusts consultation – As announced at Autumn Budget 2017, the government will publish a consultation on the taxation of trusts, to make the taxation of trusts simpler,
fairer and more transparent.
STEP has a trust consultation working group in place to review the consultation document as soon as it is published.
Individuals providing services via personal companies: the provisions that have applied in the public sector since April 2017 are being extended to private companies from April 2020. These provisions impose a duty on the ’engaging’ company to operate PAYE on amounts paid to the service company. These provisions will only be applied to large and medium-sized businesses.
- The budget Red Book (pdf)
STEP will continue to monitor the progress of the budget proposals and keep members updated.