Michael Lansdell provides an overview of Philip Hammond’s first Spring Statement, and key points for dental practice owners
We had two Budgets and three Financial Bills in 2017, which for many, was more than enough. The Spring Statement lasted a grand total of 25 minutes and was essentially a review of the public finances. It was also an opportunity to publish consultations before any announcements in the Autumn Budget.
So, nothing headline grabbing, but here’s a glance over the Spring Statement and how it may relate to your business.
From April, the VAT threshold will remain at £85,000 for the next two years, as per a previous announcement. Mr Hammond said he would consult on whether growth could be incentivised by looking again at how VAT is structured.
Payments/settlements systems (including the Bank of England’s) are to be renewed to harness the power of the latest technologies. The government pledged its support to these changes, and it will be consulting on them.
On a related note, views will also be sought on how online platforms could help users comply with their tax obligations.
If an individual now owns less than 5 per cent interest in a company, because the company has issued trade to raise capital, they should be able to claim Entrepreneur’s relief, says the government.
Views had previously been sought on this topic. It was announced that the first of more frequent, three-yearly revaluations for business properties would be in 2021.
Self-funded work-related training
Have you – or a colleague – undertaken this? Well, the government is going to look at how tax relief can be extended and how the system can be both simplified and protected from misuse.
Coming up in April…
No new tax measures were introduced, but some previously announced changes are coming into force in April. The personal allowance is rising to £11,850 (for basic rate, to £34,000 and higher rate, £46,350). This excludes Scotland, who will have five new tax bands for 2018/19. If you are on a higher rate in Scotland, this isn’t great news as the threshold is going to start at £2,920 below the rest of the UK. As previously announced, the dividend tax allowance will be reduced to £2,000.
The national insurance contributions (NICs) threshold is also increasing by 3 per cent and Class 2 NICs will now be phased out for 2019/20.
If you have a company car, tax will rise for all by the highest emission vehicles.
The residence nil rate band for Inheritance tax (IHT) will rise; the main rate band will remain unchanged. There could be changes afoot by the Autumn Budget, however, a review of IHT conducted by the Office of Tax Simplification is due to report around then.
As for pensions, the minimum contributions for workplace pensions under automatic enrolment will increase. The lifetime allowance will rise in line with inflation (it’s been on a downward path since 2012).
Finally, both income tax and NICs will apply on all payments in lieu of notice (PILONs) in 2018/9.
If you want specific data, or clarification, contact Lansdell & Rose. We can help your practice to stay ticking away efficiently and profitably during the next financial year – and beyond.
Michael Lansdell is a founding partner of specialist dental and medical accountants Lansdell & Rose and a chartered accountant. For more information, call Lansdell & Rose on 020 7376 9333, or visit www.lansdellrose.co.uk