Budget Changes

Budget changes you may not realise have happened …

As is usual when a general election is called, the government had to decide, with the approval of the opposition, what legislation can be passed into law before parliament was dissolved. The Finance Act arising out of the recent budget is a major casualty this time. Of the 135 clauses in the bill, 72 have been deleted along with 18 out of 29 schedules. Originally a 762 page document, the Finace Act ended as 140 pages.

Here is a summary of what did and didn’t make the cut …

Still remaining includes:

• Income tax rates, bands, etc, for 2017/18
• Alcohol and tobacco products duties
• Soft drinks industry levyIPT rates and anti-forestalling
• Corporation tax for financial year 2017
• Intermediaries (IR35) and the public sector
• Overseas pensions changes
• Abolition of employee shareholder regime
• Disguised remuneration – income provided through third parties
• Taxation of salary sacrifice arrangements

Now omitted are:

• Making Tax Digital with provisions for digital reporting and record keeping

All corporation tax sections, including:

• New regime for losses, and corresponding anti-avoidance provisions
• Corporate interest restriction
• Substantial shareholdings exemption
• Deemed domicile provisions
• Restriction of dividend allowance to £2,000
• Calculation of profits of trades and property businesses
• New trading and property allowances
• All investment relief provisions – EIS, SEIS, VCT, social, and business investment reliefs
• Restriction to money purchase annual allowance

So, what will happen to these measures?

Well, if we elect the same party to govern it is likely that they may all come back in the next budget, possibly somewhat postponed. In any event, some measures, such as the non-dom changes were always going to be backdated to 6thApril 2017.

But, of course, we cannot be certain exactly what will happen …