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Autumn Budget 2017 - A good deal for first-time buyers

Philip Eagle

Tax Director
11/03/2019

The chancellor delivered his Autumn budget in a buoyant mood, with several jokes thrown in for good measure (albeit not very funny!), even directly aiming one at Lewis Hamilton when discussing extra tax on private jets!

Stimulation of the housing market was a strong theme in the chancellor’s speech, with several measures proposed to stimulate the housing market, principally the abolition of stamp duty land tax for first-time buyers on houses worth up to £300,000.

On a positive note more funding was promised for the NHS over the course of this parliament, but on the downside GDP was downgraded for 2017 from 2% to 1.5%, with a further downgrade in 2018 from 1.6% to 1.4%.

The key points at a glance include:

  • A 1% increase in the rate of research & development (R & D) tax credit large companies (and in some cases small and medium-sized enterprises) that carry out qualifying R&D expenditure and claim the research and development expenditure credit (RDEC) is being brought in from 1st January 2018.
  • A new condition is inserted into the Enterprise Investment Scheme legislation which seeks to exclude tax-motivated investments, where tax relief provides most of the return for an investor with limited risk to the original investment. Broadly the new condition requires a “reasonable” view to be taken at the outset as to whether an investment has been structured to provide a low risk return for investors. If it is decided so then tax relief will be denied.
  • Stamp duty land tax (SDLT) is abolished for first-time buyers on homes purchased up to £300,000. There is also a further exemption for properties worth up to £500,000, where SDLT won’t be payable on the first £300,000 of such purchases. Both these measures are effective immediately.
  • The national living wage is set to rise from £7.50 per hour to £7.83 per hour from April 2018.
  • The personal allowance is to increase to £11,850 from April 2018.
  • The higher rate tax threshold is to increase to £46,350 from April 2018.
  • Diesel company car drivers will see a 1% benefit-in-kind rate increase from April 2018.
  • Employees who charge their electric vehicles at work will not face a benefit-in-kind tax charge from April 2018.
  • The VAT registration threshold will be retained at £85,000 for the next two years.
  • Indexation allowance for companies is to be frozen at January 2018 on capital disposals.
  • From April 2019 income tax will apply to royalties relating to digital retail sales in the UK.

If you would like to discuss any of the key points mentioned further, our specialist tax experts are here to help. For further information on the Autumn Budget please visit www.hallidays.co.uk/news/business-news/archive/news-article/2017/November/autumn-budget-2017 or contact the tax team on 0161 476 8276 or email hello@hallidays.co.uk

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