22 November 2017

Autumn Budget 2017: Looking forward, not backward

We provide a full summary of the key announcements made by the Chancellor during the Autumn Budget 2017.

Building a Britain ‘fit for the future’: the Chancellor used his Budget speech to present a vision for the country that combines fiscal responsibility with infrastructure investment.

This was not the easiest environment in which to deliver a Budget, given stalling Brexit negotiations, a vulnerable government and an economy with downgraded growth rates. Nevertheless, Philip Hammond cracked several jokes while announcing a range of measures to help families, businesses and the NHS.

Encouraging technology and innovation formed an important part of the Chancellor’s vision. Measures include an increase in the R&D tax credit to 12% and a doubling of Enterprise Investment Scheme investment limits for knowledge-intensive companies. Philip Hammond’s high-tech future is also one where employees charging electric vehicles at work will not suffer a benefit-in-kind charge.

From a business tax perspective, the Chancellor reaffirmed the Government’s commitment to retaining competitive corporate tax rates, but announced a freezing of the indexation allowance for corporate capital gains. As for VAT, despite speculation, there will be no change in the current £85,000 registration threshold for the next two years.

Philip Hammond highlighted the challenge of maintaining a sustainable and fair tax system in this digital age, an issue addressed in a new position paper. Meanwhile, the Government will charge income tax on royalties relating to UK sales that are paid to low-tax jurisdictions, the latest move in the mission to ensure that multinationals pay their fair share of tax. A package of anti-avoidance provisions is expected to collect an extra £4.8 billion in tax by 2022/23.

Personal taxpayers may be pleased by the increase from April in the personal allowance to £11,850 and in the higher rate threshold to £46,350 – whether or not this will be carried across to Scottish taxpayers remains to be seen in the December Scottish Budget. MPs cheered the freeze in duty on most alcoholic drinks (except high-strength white ciders) and the continued fuel duty freeze. House-building is also being boosted through measures aimed at delivering 300,000 homes a year by the mid-2020s.

This year’s final flourish was the announcement of help for first-time buyers – the abolition of Stamp Duty Land Tax on house purchases up to £300,000 or on the first £300,000 where houses cost up to £500,000. Again, we'll need to wait until the December Scottish Budget to see if a similar announcement is made in relation to the Land and Buildings Transaction Tax.

For more information on the key announcements, please click on the links below:

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