The Chancellor Philip Hammond has set an early Autumn budget this year and is due to announce the fiscal budget on 29 October. The Budget is due only a few weeks prior to a crucial Brexit summit in Brussels. Unusually, it will take place on a Monday for the first time since 2008, in the midst of the financial crisis.
There have been many reports of public debt levels decreasing to their lowest since 2002 and as such, we should expect some easing in austerity measures alongside tax reliefs. Any potential tax reliefs have been kept tightly sealed however, we would expect the usual increases in personal allowances and NIC thresholds. To encourage businesses to continue investing within the UK, on the lead up to Brexit, there may be an increase in the current Annual Investment Allowance of £200,000 to the previous levels of up to £500,000, and increases to the R&D tax relief regime to encourage investment in innovations.
There are also murmurs of a potential reduction of tax relief available to those paying into their pension along with the elimination of the personal dividend allowance to £NIL from the current £2,000 per year allowance.
Whilst a further reduction of the rate of corporation tax to 17% from April 2020 has already been announced, it is unlikely that a further drop will be announced despite calls for this to attract post-Brexit investors. Of course, the legislation for a reduced rate of corporation tax to apply in Northern Ireland already exists, however this remains subject to a sustainable budget being submitted by a local Executive – both of which still appear some way off.
Keep up to date with the Budget announcements on 29 October 2018 on our Twitter feed @GrantThorntonNI and website www.grantthorntonni.com