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Tax in 2017/18

17 January 2018

Download our free tax calendar to help you remember all those tax deadlines in 2018.

Although the Autumn Budget didn’t contain many surprises (see our update) there are none the less a few tax changes taking effect this year that you should now be planning for.

Top changes include:

  1. The dividend allowance (the amount you pay 0% tax on) is reducing from £5,000 per annum to just £2,000 per annum from 6 April 2018. Owner managed companies should therefore be considering the timing of dividends to make the most of the 2017/18 allowance.

  2. New income tax interest relief rules are being phased in over the next few years for landlords. These started in April 2017 but relief will be further restricted from 6 April 2018. If you haven’t already done so, you may wish to consider your financing options.

  3. New property and trading allowances also took effect for 2017/18 onwards and it’s well worth considering the timing of receipts if you think your profits could be less than £1,000.

  4. The Scottish Government announced plans to change the Scottish income and tax rates and bands from 5 April 2018. These will see Scottish taxpayers now paying tax at different rates from the rest of the UK. The proposed new bands (for non-dividend income) are:

 

Scottish Taxpayers

Rest of UK

 

Band (£)

Rate

Band (£)

Rate

Personal allowance

0 – 11,850*

Tax free

0 – 11,850*

Tax free

Starter

11,850 – 13,850

19%

n/a

n/a

Basic

13,850 to 24,000

20%

11,850 – 46,350

20%

Intermediate

24,000 – 44,273

21%

n/a

n/a

Higher

44,273 – 150,000

41%

46,350 – 150,000

40%

Top

Over 150,000

46%

Over 150,000

45%

* the personal allowance is reduced if your income is over £100,000.

If you would like any further information regarding the changes or how these affect you please contact your usual Springfords advisor or probertson@springfords.com.

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