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Spring Statement 2018

By P&A Knowledge Team • 7 December 2017 • Posted in General

The Chancellor, Philip Hammond has announced that he will deliver his Spring Statement to the House of Commons on Tuesday, 13 March 2018.

This will be the first Spring Statement to take place following the government’s decision to switch to a new cycle with the annual Budget taking place in the autumn and the annual Statement taking place in the spring.

The Spring Statement will be used to give an update on the state of the economy and will respond to the economic and fiscal forecast published by the independent Office for Budget Responsibility. The Spring Statement will also be an opportunity to publish consultations, including initiating early-stage calls for evidence and consultations on long-term tax policy issues.

The Chancellor has said he will not make significant tax or spending announcements at the Spring Statement, unless the economic circumstances require it. However, given the current uncertainties around Brexit there could be scope for further material announcements to be made next March.

Finance Bill 2017-18 is published

By P&A Knowledge Team • 6 December 2017 • Posted in General

The Finance Bill 2017-18 was published on 1 December 2017 and runs to relatively modest 192 pages. The Bill contains the legislation for many of the tax measures that have been announced by the Government at Autumn Budget 2017.

The Finance Bill introduces a number of diverse measures including the introduction of a new permanent stamp duty land tax relief for first-time buyers, the freezing of the capital gains indexation allowance from the end of 2017, increases in vehicle excise duty and company car tax rates for diesel cars, and higher limits for some Enterprise Investment Scheme and Venture Capital Trust investments.

The Finance Bill will also put in place several new measures to tackle tax avoidance, evasion, and non-compliance in areas including offshore trusts, disguised remuneration and VAT evasion by online sellers.

Mel Stride, Financial Secretary to the Treasury, said:

'The UK must have an economy that is fit for the future and this Finance Bill takes important steps to deliver just that. We are backing the innovative businesses that power our economy, helping our young people to get on the property ladder and making our tax system fairer so that we can continue to fund our vital public services.'

The Finance Bill, officially known as Finance (No. 2) Bill 2017-19 will go through a number of stages in the House of Commons before proceeding through a further process in the House of Lords prior to becoming an Act of Parliament. The Bill will become known as the Finance Act 2018 when it receives Royal Assent.

Reminder of current tax relief for pension contributions

By P&A Knowledge Team • 6 December 2017 • Posted in Pension

Many commentators had predicted that the Chancellor would further reduce the annual amount that can be saved into a pension as part of the Budget measures. However, these fears appear to have been unfounded as no changes were announced.

The annual allowance for tax relief on pensions will remain at the current level of £40,000 for 2018-19. There is also a three year carry forward rule that allows taxpayers to carry forward unused annual allowance from the last three tax years if they have made pension savings in those years.

There is a tapered reduction of the annual allowance for high earners. Those with income in excess of £150,000 will begin to see their allowance tapered. For every complete £2 their income exceeds £150,000 the annual allowance is reduced by £1, up to a maximum reduction of £30,000 for individuals whose income is over £210,000.

Planning note

There is a separate allowance known as the Money Purchase Allowance (MPAA) which applies once money has been taken from a pension pot. This allowance was reduced to £4,000 (was £10,000) from April 2017. The MPAA effectively stops an individual using the flexibilities to access a money purchase pension arrangement and then divert their salary into their pension scheme, gaining tax relief, and effectively withdrawing 25% tax-free.

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