Philip Hammond will soon be at the despatch box delivering his first budget. Here are some of the issues we know will be included, in particular personal tax and National Insurance changes.
In no particular order, changes already announced include:
- The personal tax allowance will increase to £11,500 and the higher rate threshold will rise to £45,000.
- The annual ISA limit will increase to £20,000.
- Both employers and employees will start paying NICs on weekly earnings above £157.
- The government will legislate for a new Income Tax exemption and NICs disregard to cover the first £500 worth of pension advice provided to an employee in a tax year. It will allow advice on both pensions and general financial and tax issues relating to pensions.
- The government will legislate in Finance Bill 2017 to set out a detailed method for calculating the taxable value (cash equivalent) of an asset provided to the employee which is made available for private use. This means that employees will just pay tax for those days on which the asset is available for private use. This will provide clarity for both employees and employers.
- As announced at Autumn Statement 2016, the government will legislate in Finance Bill 2017 to 2018 to extend the existing IHT exemption for donations to political parties to include donations made to qualifying political parties in the devolved legislatures and parties that have acquired representatives through by-elections. These changes will modernise the IHT exemption and reflect changes to the political landscape in which political parties operate.
- Legislation will be introduced in Finance Bill 2017 to create 2 new allowances for individuals of £1,000 each, 1 for trading and 1 for property income. The trading allowance will also apply to certain miscellaneous income from providing assets or services.
No doubt there will be further changes announced next week.