Chancellor Philip Hammond announced the last Budget before Brexit, on Monday the 29th of October 2018.

As the country heads towards a period of uncertainty, it was in all, a fairly good Budget, with a host of increased tax allowances, many of which were brought forward and the deferral of upcoming changes to IR35 contracts for the private sector contractors.

We’ve summarised the main points for you below:

Personal allowances and tax rates

From April 2019

• The Personal Allowance increased to £12,500.
• The basic rate limit will be increased to £37,500

National Living Wage

• From April 2019 the National Living Wage will increase from £7.83 an hour to £8.21. This will benefit around 2.4 million workers, and is a £690 annual pay rise for a full-time worker. If you are paying your staff below £8.21 at the moment, please ensure you pencil in a review of salary before the 1 April 2019 so you can ensure you are not paying below the National Living Wage for the 2018.19 tax year

Off-payroll working & IR35 (contracting for one main employer)

• From April 2020: the off-payroll working rules apply to medium and large companies. We will be speaking to our clients affected by this in more detail over the coming six months, there was talk this was to be introduced for 6 April 2019 so the deferral to 2020 is welcoming.

CGT Annual exempt amounts

• From April 2019: The annual exempt amount increases to £12,000 for individuals and personal representatives and £6,000 for trustees of settlements.

CGT Private Residence Relief (disposing of rental property you once lived in)

From April 2020

• The government will reform lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant.
• The final period exemption will also be reduced from 18 months to 9 months.

Research & Development Relief

• From April 2020 the amount of R & D relief that an SME may claim is to be capped at three times its PAYE and NICs liability for the year.

VAT Registration thresholds

• No changes to the registration thresholds for two years until April 2022. Further announcements once Brexit is agreed.

There was also increased stamp duty relief for first time shared equity buyers up to £500,000 and also not forgetting that beer, cider and spirits duties to be frozen which is welcome relief for pubs who have been campaigning for this.

The Chancellor also announced more measures for business relief rates to help our high street businesses although as many high street business tenants will tell you and indeed what we have seen affecting our larger chains, such as House of Fraser this year, it’s the rent charged by the landlords currently that is putting a strain on the finances.

If you’d like to know more on how any of these changes will affect you or your business, please feel free to get in touch.