What does the Chancellor have up his sleeve – and what is already in the Finance Bill?

We have already had one Budget this year, but many of its announcements had to be excluded from the Finance Act which would have made them law, as the Bill had to be slimmed down to rush it through Parliament ahead of the General Election.

Therefore we had a second Finance Bill to reinstate those provisions which were excluded first time around. However, given that the Chancellor announced that the Spring Budget would become a thing of the past, and that a single Autumn Budget would be put forward in future, we can also expect some new measures. As well as announcements relating to Brexit, there are several announcements closer to home to be considered.

Some of the more significant changes which were announced in the Spring were:

  • The reduction in the dividend allowance threshold from £5,000 to £2,000, to be effective from 6 April 2018
  • Tax exemption for employers paying up to £500 for employees to get pensions advice
  • Tightening the rules on tax free employment termination payments
  • Introduction of £1,000 trading and property allowance, exempting small amounts of income from these sources
  • Changes to the rules on corporation tax loss relief to make them more flexible
  • Relaxation of the Substantial Shareholder Exemption rules which allow companies to sell shareholdings in other trading companies without a charge to corporation tax. Crucially these remove the requirement that the selling company must be a trading company or holding company of a trading group after the sale.
  • Tightening of domicile rules for people who were born in the UK or are long term residents here.
  • Tightening of anti-avoidance rules on loans and disguised remuneration

As to new proposals, whilst we don’t have the number of “leaks” and well-informed speculation that have been a feature of recent Budgets, it has been suggested that:

  • Tax changes will be made to favour younger people at the expense of older ones – pensions tax relief being a potential target. Certainly, if you are planning a contribution this tax year, it wouldn’t do any harm to pay it before Budget day.
  • The increases in National Insurance Contributions (NIC) for the self-employed, which were introduced and then withdrawn previously, will be tabled again

We will be following events on the day closely, and will be posting our reaction to the announcements on our web site that evening.