Budget 2018: Key tax changes
As expected, yesterday's budget brought in some significant tax changes.
The introduction of a new digital services tax had been trailed and came as no surprise. The good news for SMEs was that it will only apply to businesses with global revenues exceeding £500 million and so many will be unaffected.
The Budget brought confirmation that the public sector off-payroll working rules (IR35) will be extended to the private sector. Whilst this will prove burdensome for many businesses, the rules will not come into force until April 2020 and will only apply to large and medium sized businesses.
The extension of the required holding period for Entrepreneurs' Relief from 12 to 24 months feels arbitrary but most shareholders should not be impacted. More significant are the new requirements that the individual must have a 5% interest in both distributable profits and net assets in the company.
The Budget brought positive news on real estate tax, including the extension of the AIA from £200,000 to £1 million, the introduction of a new structures and buildings allowance and the extension of first-time buyer's relief from SDLT to shared ownership property buyers.