BUDGET - 08.12.2017

Was it really a low-key Budget?

VAT freeze. Ahead of the Budget scaremongers latched on to a story that the VAT registration limit would be slashed overnight to around a quarter of its current level. It had the feel of leaked disinformation to us, so that when the Chancellor announced that the threshold will only be frozen at £85,000 until April 2020, instead of radically cut, there was a sigh of relief. However, the freeze will drag thousands more small businesses into the VAT net. What’s more, we think there’s a good chance that the freeze will be extended in a future Budget.

Green cars. On a more positive note, the Budget included good news for green car drivers. More money will be available so that “plug-in car grants” can continue until 2020. These are paid to manufacturers and dealers who use the money to reduce the selling price of electric and hybrid cars by up to £4,500. So if you’re in the market for an environmentally friendly car, act before the grant comes to an end. The second green announcement regarding cars was that from 6 April 2018 there will be no benefit in kind tax or NI charge where an employer provides free electricity for employees to charge their cars.

First timers. One of the headline-grabbing announcements was the new stamp duty land tax (SDLT) exemption for first time home buyers from 22 November 2017. Until further notice they’ll pay no SDLT on the first £300,000, then 5% on the next £200,000. This only applies to homes in England and Wales, but it might not continue in the latter after 31 March 2018 because SDLT is to be replaced by the land transaction tax. So if you’re buying a first home in Wales act quickly.

Higher rate SDLT. Also from 22 November 2017, the extra 3% SDLT which applies to the purchase of a second (and subsequent) residential property won’t apply where the buyer’s other property is occupied by their spouse from whom they are separated and there are divorce proceedings.