No move on VAT is welcome

The decision by the Chancellor Philip Hammond not to lower the VAT threshold as part of his Budget measures is very welcome news for small businesses.

There was widespread concern before his speech that he would make the move and as a result many businesses would have struggled with the burden of administration and the impact it would have on their operations.

So it is good that the Chancellor has listened to the genuine concerns of SMEs and has decided not to take this approach and the VAT threshold will remain at £85,000.

The increase in R&D tax credits that the Chancellor announced is also to be welcomed as a positive sign of commitment to encourage innovation.

And here it is worth remembering this is of benefit not just to high-tech companies but businesses in all sectors of the economy.

The doubling of the EIS limits for certain “knowledge-intensive” companies is a further boost.

And the move to increase business rates in line with CPI rather than RPI is also a step in the right direction.

Also, the commitment towards re-training existing workers is an important statement of intent, as are the moves to get the country building again, with £44bn of capital funding committed to the housing challenge over the next five years.

The SDLT abolition on the first £300,000 purchase price will also provide a significant boost for first time buyers.

When it comes to increasing the personal allowance to £11,850 and the higher rate threshold to £46,350, these are the type of rises that we have become accustomed to, so no surprises there.

The change in Stamp Duty, which came into effect immediately, will mean those buying properties worth up to £300,000 – or up to £500,000 in more expensive areas – will save £5,000.

The government will also set aside £3bn for Brexit preparations, spend an extra £2.8bn on the NHS in England up to 2022 and freeze most alcohol duties.

Mr Hammond also announced a£1.7bn ‘Transforming Cities’ fund for local transport investment – with half going to areas with elected mayors such as Liverpool and Manchester.

If you would like to discuss any aspect of this article or have any tax queries or concerns please contact me on 01772 430000

 

Kevin’s specialisms include income tax, capital gains tax, inheritance tax and PAYE. Areas of work he has undertaken include dealing with HMRC enquiries and meetings with HMRC, inheritance tax planning reports, advising on capital gains property disposals and remuneration planning.