Key Takeaways From The Autumn Budget 2017
The whole country waited in anticipation for the Autumn Budget to be released this week, with Brexit looming large on discussions. While overall there were very few major announcements in the Budget 2017, reading through…
10 Minute Read
The whole country waited in anticipation for the Autumn Budget to be released this week, with Brexit looming large on discussions. While overall there were very few major announcements in the Budget 2017, reading through the small print reveals some important changes for certain individuals who need to file a Self Assessment tax return.
To get a better understanding of what was announced in the Autumn Budget 2017, let us outline some of the key takeaways for those with earnings outside of PAYE.
Personal allowance increase
The Treasury’s tradition of raising the tax-free personal allowance in line with inflation has been continued in the 2017 Budget, with the Chancellor increasing this from £11,500 to £11,850 in April 2018 for basic rate taxpayers.
As a result, the typical taxpayer is now £1075 better off per year compared to 2010. Higher rate taxpayers also got a nod in the Budget; they will see their tax-free allowance rise to £46,350 in April 2018.
VAT threshold freeze
For the self-employed, the key announcement was the VAT threshold freeze. While it’s good news that the Chancellor resisted pressure to decrease this from £85,000, a 2-year freeze at a time of inflation could mean that some self-employed professionals are drawn over the VAT threshold in time for the rollout of Making Tax Digital in 2019.
More can be found on this and other changes affecting the self employed here.
Relaxed tax on business travel
Another win for sole traders and independent professionals was the freeze on fuel duty, along with the extension of first year allowances for businesses investing in zero emission goods vehicles.
However, it’s not just the self-employed who benefited on business travel in the Budget; simplification to mileage rates for unincorporated landlords bring the means of claiming mileage allowance in line with sole traders. As such, it will be much easier for landlords to calculate allowable deductions for motoring expenses on their tax return.
Changes to EIS, SEIS and VCTs
Investors using the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs) should take note of new measures to clamp down on tax-motivated investments announced in the Autumn Budget 2017.
From now on, in order to qualify, the business you’re investing in has to have clear objectives to grow and develop over the long term. The government is pushing for investors to opt for schemes with significant risk in order to justify their tax claims.
Backdating on the marriage allowance
When filing their Self Assessment, taxpayers with a recently deceased spouse can find themselves unable to claim for the marriage allowance in that tax year. However, these rules have now been relaxed; those with deceased partners can now backdate their marriage allowance claim by up to four years, a welcome change for those affected.
No news on IR35 changes
There was one major omission in the Budget 2017, and this related to contractors. Since changes to IR35 affecting those working in the public sector, many contractors expected these to be extended to the private sector. The Chancellor made no mention of this, meaning plans to rollout IR35 changes are likely to be delayed further.
These are the key takeaways from the Autumn Budget 2017 for anyone who needs to complete a Self Assessment tax return. Wondering how incoming changes affect your take-home pay? We’ve updated our salary calculator to include the new 2018/19 personal allowance, and will continue to keep you updated on any developments affecting non-PAYE earners as they arise.
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