Budget 2018 Highlights

UPDATE: our Budget commentary is now available here.

The Chancellor has now made his final Budget speech before Brexit.  Here are a few highlights.  Watch out for our in depth commentary, coming soon.

​The highlights:

• The income tax personal allowance is rising to £12,500 from April 2019.
• The basic rate band is rising to £37,500 from April 2019.
• These announcements mean that the 40% tax band will only apply when income exceeds £50,000 and is taking effect a year earlier than originally planned.
• The 10% Entrepreneurs' Relief for CGT is to remain, but the required period to meet the conditions is being doubled from 12 months to 24, effective from 6 April 2019.
• The relief for a sale of your main home is being restricted.  The relief that covered the period after you move out now only covers the final 9 months of ownership instead of 18 months.
• The residence relief used to be extended if your main home had been let while you owned it, but this is now being significantly restricted.
• No change in the announced corporation tax rates.
• The capital allowances annual investment allowance is to rise from £200k to £1m from 1 January 2019 for a period of two years.
• The capital allowances annual rate of 8% in the special rate pool is to be reduced to 6% from April 2019.  This appears to be linked to a new "Structures and Buildings Allowance (SBA)" of £1m per annum.  
• Off Payroll Working - as expected the changes that hit those working for Public Sector bodies will also be extended to the private sector, although this will be delayed by a year and will take effect in April 2020.  The deductions regime will hit those working for end clients that are "large or medium".  
• Where small companies want to claim a cash tax credit for R&D expenditure a new limit will be imposed to restrict the refund to 3 times the company's PAYE for the relevant year.  The change will affect accounting periods that begin after 31 March 2020.