The Chancellor, Philip Hammond, delivered his Spring Statement to Parliament on the 13th March. We’ve been paying close attention to the announcements and how they will impact on our clients’ financial circumstances. The Statement was relatively brief, but in this article, we’ve highlighted some of the main points for you to be aware of.
After two full Budgets last year, the Chancellor’s Spring Statement was a less dramatic affair, with no announcements of tax changes. However, these will come in the Autumn Budget.
The Chancellor used his Spring Statement to launch several consultations and other papers about future proposals, ranging from ways to raise more taxes from international digital businesses to a proposal to extend entrepreneurs’ relief to certain shareholders. The Chancellor has also been pondering over the possibility of lowering the VAT threshold.
Income tax rates and allowances
The new 2018/2019 tax year will see the usual changes to the income tax rates and allowances, together with national insurance contributions. The personal income tax allowance will rise to £11,850, with the higher rate threshold increasing to £46,350. The zero percent starting band for savings income will remain at £5,000.
There will also be a cut in the dividend allowance and some special new tax rates for Scottish taxpayers.
Whilst many employees will see an increase in their extra net income from these tax changes, this may well be eaten up by their higher minimum auto-enrolment pension contributions.
The lifetime allowance for pensions will be increased by 3% from the start of the new tax year, with the weekly state pension rising by 3% to £125.95 if you receive the basic state pension. People covered under the new state pension will see the full level of their new state pension increase from £159.55 per week to £164.35 a week.
Enterprise Investment Schemes (EIS)
From the 6th April, the maximum limit than an individual can invest in an EIS will rise to £2,000,000 in any tax year, provided the surplus over £1,000,000 is invested in one or more knowledge intensive companies.
Get in touch to find out more about how the 2018 Spring Statement may affect you
To find out more about how the Spring Statement may impact on your financial position, please telephone us on 01772 729742 or alternatively, simply fill out our online enquiry form to arrange a meeting with an adviser at Springfield Financial Services.
The information provided is based on our current understanding of the 2018 Spring Statement and associated documents and may be subject to alteration as a result of changes in legislation or practice.