2018 – Tax and finance changes
We are now well into 2018 and fast approaching the tax year end. Nicola Roby, Director at CHW Accountants Bolton highlights some tax and finance changes coming into force on 6 April 2018.
The annual personal allowance will increase to £11,850 across the UK, while the higher rate threshold will rise to £46,350 in England, Wales and Northern Ireland.
For taxpayers in Scotland, for the first time, there will be 5 income tax bands and rates.
The higher rate threshold in Scotland will rise to £44,274 – and 2 new income tax bands will also be in play. Assuming individuals are in receipt of the personal allowance, these are:
As of 22 November 2017, first-time buyers in England and Northern Ireland have been exempt from paying stamp duty on properties worth up to £300,000.
In response, Wales announced it will raise its land transaction tax rate from £150,000 to £180,000 for all homebuyers as of 1 April 2018.
From 6 April 2018, first-time buyers in Scotland will be able to buy a property worth up to £175,000 without incurring land and buildings transaction tax.
The Corporation Tax rate around the UK is unchanged and will remain at 19% from 1 April 2018.
Research and development expenditure credit (RDEC)
RDEC increased to 12% on 1 January 2018.
Enterprise investment scheme (EIS)
From 6 April 2018, it will be possible to invest up to £2 million in knowledge-intensive companies under the EIS.
A knowledge-intensive company is classed as a small, innovative business carrying out R&D and other activities to develop intellectual property for its own purposes.
The current VAT thresholds remain unchanged until 31 March 2020.
A business must be VAT-registered when their taxable turnover in the last 12 months exceeds £85,000 or is expected to exceed £85,000 in the next 30 days.
An individual can apply to deregister for VAT if taxable turnover drops below £83,000 in the last 12 months.
Capital Gain Tax (CGT)
If your company makes a capital gain on or after 1 January 2018, the indexation allowance that determines the chargeable gain will be calculated up to December 2017.
For 2018/19, the CGT allowance will rise to £11,700.
Inheritance tax (IHT)
The IHT threshold of £325,000 and other rates remain unchanged for 2018/19. However, the residence nil-rate band increases to £125,000 from 6 April 2018.
This can be added to the basic IHT threshold giving a combined total of £450,000 if the person and their estate meet certain qualifying conditions – and it can be doubled for married couples.
The annual ISA limit stays at £20,000 for the next financial year. The junior ISA threshold will increase to £4,260 from 6 April 2018.
For tax advice or any other issue relating to your accounts and finances, contact Nicola Roby at CHW Small Business Accountants in Bolton on 01204 534031 or via email at Nicola.Roby@chw-accounting.co.uk.
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