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Philip Hammond has recently delivered his third Budget speech and I have waded through the jargon to provide you a summary of the changes that maybe relevant to you.

Capital allowances 

From 1 January 2019, the annual investment allowance (AIA) will temporarily increase from £200,000 to £1 million. Please note that transitional rules apply where an accounting period spans the effective date of the increase. For example, an accounting year end 31 March 2019, the AIA will be apportioned at the relevant rates across the period. (Pre 1 January 2019 - £200,000 x 9/12 = £150,000) + (Post 1 January 2019 - £1,000,000 x 3/12 = £250,000) = £400,000.

The 100% first-year allowances for energy saving plant and machinery will come to an end on 5 April 2020. The current 100% first-year allowance for expenditure incurred on electric charge-point equipment, which the Government had previously announced would expire on 5 April 2019, has been extended to 5 April 2023.

The Government will introduce a new Structures and Buildings Allowance (SBA) for new non-residential structures and buildings. The allowance will have an annual rate of 2% and will be provided on eligible construction costs incurred on or after 29 October 2018.

R&D tax credits

From 1 April 2020, the amount of payable R&D tax credit that a qualifying loss-making Company can receive in any given tax year will be restricted to three times the Company’s total PAYE and NIC liabilities for that year. 

Pension lifetime allowance

The pension lifetime allowance will increase to £1,055,000 for the 2019/20 tax year.

Car and van benefits

The amount to which the appropriate percentage is applied in determining the taxable benefit of company car fuel is £24,100 for 2019/20 (£23,400 for 2018/19). The cash equivalent of the benefit of a company van for 2019/20 is £3,430 (£3,350 for 2018/19). The cash equivalent of the benefit of van fuel for 2019/20 is £655 (£633 for 2018/19).

General note: If you are considering purchasing a new company car (wholly electric or hybrid) there are some important planning issues to consider before you do so, particularly around the potential benefit-in-kind charges proposed from April 2020.

Employment allowance

Currently the majority of employers can claim an employment allowance of £3,000 to offset against their employer Class 1 NICs. From 2020, the Government will restrict the allowance to employers with an employer Class 1 NIC liability of less than £100,000 in the previous tax year. Please note that where employers are connected, the £100,000 threshold will apply to their combined liability.

Entrepreneurs’ relief

The qualification period throughout which certain conditions must be met to qualify for entrepreneurs’ relief will increase from one year to two years and will be introduced for disposals made from 6 April 2019, but it starts having an effect immediately.

For disposals on or after 29 October 2018, two new tests will be introduced meaning that claimants will have to be beneficially entitled to at least 5% of both the Company’s distributable profits and net assets.

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