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Business News

The Budget 2018 - Carrington outline the key points outline

The Budget 2018 - Carrington outline the key points outline

November 5, 2018

We recently saw Philip Hammond deliver his 2018 Budget – the last one before the anticipated ‘Brexit’ and one that could be obsolete should we have a ‘no-deal Brexit’. The below is a summary of Carrington Accountancy’s Budget Report 2018, which details all the main announcements and changes.

 

For our contractor clients the highlight (or rather lowlight) was the announcement that the off-payroll rules will be extended out to the Private Sector in April 2020. This wasn’t totally unexpected and the line is ‘to give companies time to prepare’. The rules will only apply to medium and large companies but as yet we have no detail as to what constitutes a medium and large company.

It’s interesting to see that only last month another Employment Tribunal ruled in favour of the claimant (a Dentist) who bought a claim against Nationwide Healthcare Providers Ltd who had deemed he was inside IR35.  It seems that momentum is building and more and more cases of a similar nature are starting to appear at the Employment Tribunals.

If these judgements consistently go against HMRC’s legislation it is going to be difficult to see how such a roll out will be possible without an overhaul of the existing legislation and a re-modelling of the CEST tool that HMRC states can be used to determine whether the worker is inside or outside IR35.  It is important to keep up the lobbying of your MP and again it seems that many are now starting to listen and agree it’s not workable. If you don’t already follow Dave Chaplin on LinkedIn I would urge you to do so – he has a wealth of information and advice about what you can do.

There is also value in noting the change to the qualifying period for Entrepreneurs Relief. This can prove a very useful relief when closing a limited company, but certain criteria needs to be met in order to qualify for ER. The minimum period for which this criteria must be met is being increased from one to two years and this includes holding the shares. If you are thinking that you may look to close down your company in the next few years then I would suggest that if you can allocate some shares to a spouse you do this sooner rather than later so that ER can be applied to both of you and you meet the two year criteria.

Apart from the above, other announcements were fairly positive (unless you are a smoker). Personal allowances have been increased together with the basic rate band. The zero rate threshold will increase from £11,850 to £12,500 and the higher rate threshold will increase from £46,350 to £50,000 from April 2019. The corporation tax rate remains at 19% with the intention that it will reduce to 17% by 20/21.

If you have any further queries or would like to receive a free copy of the report, please get in touch with myself via nicky.owen@carringtongroup.co.uk or my colleague John Mumford via jmumford@carringtongroup.co.uk.