The Chancellor of the Exchequer, Philip Hammond, announced his first Autumn Budget, laying out the financial plans for the coming year.
It’s fair to say that no drastic measures were announced that will affect Contractors and Freelancers, but here’s everything you need to know from Craig Whelan, New Business Manager at Gorilla Accounting.
From 6th April 2018, the Personal Allowance will increase to £11,850, and the Higher Rate Threshold will increase to £46,350. The starting rate threshold for savings will remain at £5,000. Although the Dividend Allowance was not mentioned in this Budget, it is scheduled to reduce from £5,000 to £2,000 from 6th April 2018.
As previously announced, the government has decided not to proceed with increases to Class 4 NI, paid by the self-employed.
The rate of Corporation Tax will remain at 19%, as previously planned, in 2018. However, Indexation Allowance which is applied in calculating gains on investments held by companies will be frozen from 1st January, bringing the Corporate Tax system in line with Personal Tax for Capital Gains.
Despite speculation ahead of the Autumn Budget, the VAT registration threshold will remain at £85,000 for a 2-year period from April 2018. However, a consultation is expected on the future design of the threshold in view of the fact that this is the highest in the OECD.
Making Tax Digital will commence on April 19 for VAT Registered businesses whose turnover exceeds the compulsory VAT registration threshold. The scope of MTD will not be widened until it's proven to work.
Despite speculation leading up to today’s Budget, there was no mention of IR35 in the Chancellor's speech, however, the red book referred to a consultation which is due to be published during 2018. We would not anticipate any changes resulting from the consultation to be announced until the next budget (this time next year) or to take effect until April 2019.
Despite a bold and bruising Spring Budget 2017, it’s fair to say that the Autumn Budget announcement was a mellow event for Contractors and Freelancers across the UK.