A Spring Statement in the eye of the Brexit storm

Sandwiched between a series of crucial Brexit votes, much of the Chancellor’s Spring Statement consisted of appeals to parliament to deliver an orderly exit from the EU. 

There weren’t any major tax announcements, although Mr Hammond was able to launch a number of consultations and other papers. The subjects ranged from Making Tax Digital to Child Trust Funds and enterprise investment scheme funds.

Our summary also includes a useful recap of the key changes for the forthcoming 2019/20 tax year that have already been announced and passed into law.

April will see the usual changes to the income tax rates and allowances as well as national insurance contributions. This year, there will be another significant hike in the minimum auto-enrolment contributions for workplace pensions, further increases in the tax on company cars and another £25,000 added to the inheritance tax residence nil rate band, taking it to £150,000.

Key changes to be aware of, for the forthcoming 2019/20 tax year include:

  • The personal allowance will be raised to £12,500 from April 2019, one year earlier than previously planned. At the same time, the higher rate threshold will rise to £50,000, also a year ahead of schedule.
  • Scottish tax bands have been revised, but the higher rate tax threshold remains unchanged at £43,430 – much lower than in the rest of the UK.
  • The Junior ISA limit will rise to £4,368, although other ISA limits are unchanged.
  • The pension lifetime allowance will rise to £1.055 million, with no changes to the annual allowances.
  • The VAT registration threshold has been frozen for a further two years, meaning it will be £85,000 until April 2022.
  • Entrepreneurs’ relief has been kept, but the minimum qualifying period has been extended to 24 months, to encourage longer-term investments.

If you have any questions about how the Spring Statement affects you, please get in touch.