uk-budget-summary

A clear signal that Britain is open for business

“My ambition is for the UK to be the best place in the world to start and grow a business. In 2010, Corporation Tax was 28%. From April this year, it will fall to 19%, the lowest rate in the G20. In 2020, it will fall again to 17%, sending the clearest possible signal that Britain is open for business.” – Philip Hammond, UK Chancellor of the Exchequer.

Despite coming barely three months after the distinctly downbeat Autumn Statement that followed the Brexit referendum, the UK Spring Budget had a more upbeat feel. The UK Chancellor of the Exchequer, Philip Hammond, spoke of “an economy that has continued to confound the commentators with robust growth” and a “labour market that is delivering record employment.” He also pointed to a deficit that is “down by over two-thirds.”

Hammond also commented: “As we start our negotiations to exit the European Union, this Budget takes forward our plan to prepare Britain for a brighter future. It provides a strong and stable platform for those negotiations. It extends opportunity to all our young people. It delivers further investment in our public services. And it continues the task of getting Britain back to living within its means.”

The Chancellor also pointed out that the British economy grew faster than those of the United States, Japan and France, and in 2016 was second only to Germany among the major advanced economies.

Jackie Hendley, Head of Tax at Smith Cooper, Alliott Group member in the Midlands, pointed to short-term economic numbers that have turned out much better than the Office for Budgetary Responsibility’s (OBR’s) November projections.

See below for more information on some of the key highlights and then download Budget guides from both Alliott Group UK accounting member firms.

Business Tax

  • Reduction in the main rate of corporation tax to 17% from 2020
  • Investment in R&D given further encouragement
  • Withholding tax on interest: The government will renew and extend the administrative simplifications of the Double Taxation Treaty Passport scheme to assist foreign lenders and UK borrowers, and to make it easier for businesses to raise finance.

Personal Tax

  • An increase in the personal allowance for 2017/18 to £11,500 and a corresponding rise in the higher rate threshold to £45,000, although in Scotland the latter figure will only apply to savings and dividend income
  • A reduction in the dividend allowance from the current £5,000 to £2,000 from 2018/19
  • A new 25% tax charge will be levied on transfers to qualifying recognised overseas pension schemes (QROPS), other than for those who have ‘a genuine need’ to transfer
  • The tax-free dividend allowance, which was introduced at a level of £5,000 in 2016/17, will be reduced to £2,000 from 2018/19.

Download 2017 Spring Budget Guides

Summaries

If you’re an overseas business looking to operate in the New Zealand market, Alliott NZ in Auckland provides strategic business guidance and practical financial advice on how to structure your business here. Contact us on +64 9 520 9200.

For tax advice in the UK:

  • In London and the South East, please contact David Gibbs, partner at Alliotts.
  • In the Midlands region, please contact Jackie Hendley, partner at Smith Cooper.