Our summary of last week's Budget

1. ANOTHER QUIET BUDGET…
While last week's Budget was one of the longest on record, mercifully there was little of
note from a financial planning point of view.
It would seem that the Chancellor of the Exchequer is rather more preoccupied with
the planning for Brexit, as is most of the government. Despite all the rumours that
pension tax relief or the annual allowance for contributions would be attacked, this did
not happen.
What's changed (wef 19/20 tax year):
• increases to the income tax allowance and the higher rate tax threshold were
brought forward to the 19/20 tax year, to be increased to £12,500 and £50,000
respectively. (Less people subject to higher rate tax?)
• Pension lifetime allowance to increase to £1.055 million in line with CPI.
• CGT allowance to be increased to £12,000 (£6000 for trusts)
What's new:
• New "knowledge intensive" Enterprise Investments Scheme funds with effect
from April 2020. Income tax relief will be carried back to the tax year before the
fund closes.
• Digital Services Tax of 2% on revenues of search engines, social media and
online marketplaces where revenues linked to participation of UK users.
Minimum turnover of £500 million pa globally and the first £25 million of relevant
UK revenue not taxable. (Possible conflict with the tech giants?)
• Pension Dashboard project to receive extra funding and become more industry
led.
What stayed the same:
• ISA allowance remains at £20,000, junior ISA and CTF increased to £4368 in line
with CPI.
• Individual Residential Nil Rate Band will increase to £150,000 in 19/20 and to
£175,000 in 20/21, as previously announced.
• Standard Nil Rate Band to remain frozen at £325,000 until 21/22.
• Class 2 NICs will remain for the duration of this Parliament.
• Corporation tax remains at 19%, reducing to 17% in 20/21
• Pretty much everything else!
The Chancellor did raise the prospect of a further emergency Budget, in the event of a
"no deal" Brexit. Watch this space!
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This communication is for general information only and is not intended to be individual advice. It
represents our understanding of law and HM Revenue & Customs practice as at 7/11/18. You are
recommended to seek competent professional advice before taking any action.