All Change! How will Changes to the Tax System Affect you in 2017?
Planning your Tax with the New Changes of 2017
Have you ever thought how cunning the Chancellor’s annual Budget really is? It’s a clever way of announcing lots of unpopular changes in one go, safe in the knowledge that most of them will bite at a later stage - when people’s minds have wandered off onto other matters.
Last year’s Budget, George Osborne’s last, was no exception to the rule. His priority was to recover money from the economy to increase the cycle of public expenditure and keep the wheels of government turning.
He certainly succeeded. Apart from the welcome(if underwhelming) announcement that the basic personal tax allowance will rise from £11,000 to £11,500 in the next tax year, there are key changes to tax legislation that are worth revisiting before 6th April.
The following list isn’t exhaustive, but it does give you some of the most significant changes to help with your planning
- The VAT Flat Rate Scheme is undergoing a significant change from 6 April 2017. Essentially, traders registered under the scheme who have low levels of cost on which they have paid VAT, may be required to use a fixed Flat Rate Scheme rate of 16.5%. For many traders this may make continued registration under the scheme less attractive. If you currently use this scheme please talk to your THP account manager who will advise you whether you will be affected.
- From 6 April 2017, landlords who are paying significant loan or mortgage interest payments will start to lose higher rate tax relief on these payments. The full extent of this change will not be completed for four years, but if you are a landlord who has borrowed heavily to expand your rental portfolio, you should take adviceto see how you will be affected and tolearn what strategies can be used to offset the effects of higher taxation and reductions in available cash flow from your property businesses.
- From 6 April 2017, non-UK domiciled individuals resident in the UK in at least 15 of the past 20 years will be considered UK domiciled for Income Tax, Capital Gains Tax and Inheritance Tax purposes. As part of this change, non-doms will be able to revalue assets held outside the UK for CGT purposes, as if they had been acquired on 6 April 2017.
- Employees who want to reimburse their employers for the value of certain benefits will need to make their payments by 6 July after the end of the tax year
If you have any concerns about any of the issues raised in this post, please do get in touch with us – we will be very happy to advise you.