How did the recent Budget affect people and businesses? Our latest webinar explored the key tax policy announcements and outcomes.
Our panel of tax experts covered three areas:
- Business tax changes: Anthony Newgrosh
- Property tax changes: Andrew Levene
- Personal tax changes: Geraint Jones
You can watch the full webinar here:
Autumn Budget 2017 wasn’t considered the most exciting Budget in recent history, or even the most exciting Budget in 2017. But we’ve picked out five points, covered in our webinar, that are worth highlighting.
1. Investment schemes targeted
The Chancellor chose to encourage investment into so-called ‘knowledge-intensive companies’. He achieved this by increasing the annual investment limit an individual can make into the EIS from £1 million per annum to £2 million per annum, as long as at least £1 million is invested in knowledge-intensive companies.
The amount that knowledge-intensive companies can raise through these schemes has also increased: they can now raise £10m, up from £5m per annum.
We also saw new measures to ensure that investment into EIS, SEIS and VCTs (Enterprise Investment Schemes, Seed Enterprise Investment Schemes, Venture Capital Trusts) are ‘growth investments’: investments made into genuine entrepreneurial companies. These new rules mean that companies will only quality for investment if there is a significant loss of investment and the amount of potential loss could be greater than the ‘net investment return’. This is a change designed to prevent individuals making investments for ‘capital preservation’ only.
2. Research & Development: a modest change
Although there were no changes to the R&D regime which are likely to affect SMEs (small and medium-sized enterprises), the Large Company Scheme saw the limit for R&D tax credit increase from 11% to 12%. These larger companies will now also be able to seek clearance on whether their R&D practices will qualify for the relief.
Surprisingly, approximately 50% of businesses are still unaware they could qualify for R&D tax credits. Find out more in our updated guide to R&D tax incentives.
3. Consultation, consultation, consultation
Multiple consultations will be held in 2018. Their outcomes could provoke further changes or at least bring clarity.
The consultations will cover Entrepreneurs’ Relief, Royalty Withholding Tax, Non-Resident Capital Gains Tax, taxation of trusts and the employee v self-employed situation.
4. Property: more than meets the eye
Aside from the headline-grabbing change to Stamp Duty Land Tax for first-time buyers, there were interesting points surrounding changes to Non-Resident Capital Gains Tax, whose scope is now extended to commercial property.
5. Private clients largely unscathed
For our private clients there was not a huge amount of note in this Budget. One point of interest is a change in the tax return penalty procedure, which has existed in its current form since 1996/97.
The new system will be ‘driving licence style’, where fines are paid only after four penalty points are accrued. The finer details are currently unclear, but we’ll be watching developments with interest.
For specific advice on how you or your business may be affected by the Budget announcements, please get in touch with your usual BKL contact or use our enquiry form. You can also subscribe to our mailings for news about our future seminars and webinars.
More from BKL on the Autumn Budget: