The Budget Breakfast is an annual event held each year in St Albans by Reed Finance.
The purpose of the event is to give financial professionals an opportunity to get an expert debrief of the Budget announcements, just days after they are released. This year guests were invited to the 4 star Beales Hotel where they could enjoy a full cooked breakfast, alongside the opportunity to hear from some of the top finance minds from PwC on the business implications of the freshly announced Budget 2017.
There were five speakers in total, each discussing a different financial area, you can watch our live stream here. Andy Hodge - Corporate Tax Director chaired the event. His opening address set the budget in the context of Brexit uncertainty which he asserted surely contributed to its ‘limited' nature. He furthermore predicted that there would be much more reform in the second budget of the year.
Next up was David Roche, corporate tax Manager, addressing the room on the subject of ‘corporate and international taxation'. Key factors that David highlighted included:
- Corporation Tax - This will fall to 19% from 1st April 2017. This is the lowest corporation tax rate in the G20. This will then be followed by a subsequent drop to the corporation tax main rate for the year starting 1 April 220, setting the rate at 17%
- BEPS - There will be a continuation on the push on the implementation of BEPS agenda to reduce Avoidance, evasion and non-compliance.
- Corporation Interest Deductability - Key to focus on in terms of interest restrictions as well as the compliance burdens that organisations will need to be aware of.
- New corporate loss rules - It is expected that this will affect all those with losses, could increase both tax reliabilities due to HMRC, and could increase the frequency of those payments moving forward.
Shikha Amin, Senior Manager, had plenty to discuss on the topic of ‘entrepreneurs and private business.'
- Dividend allowance – The tax free dividend allowance for individual will be reduced from £5,000 to £2,000 in April 2018.
- Offshore property developers – Legislation will be amended to tax all profits from dealing in or developing land in the UK.
- Changes to the non-dom regime – Individuals who have been resident in the UK for at least 15 years out of the last 20 years will be deemed domicile for income tax, capital gains tax and inheritance tax. This also applies to those returning to the UK.
- Reform of the substantial shareholdings exemption - There will be a simplification of the rules which exempt capital gains on the disposal of shares.
Bindi Maisuria, a Manager at PwC, took to the stage to discuss the impact this year's budget will have on Human Resources, including the impact of IR35.
- Personal Tax – There will be an increase in the tax free personal allowance from £11,000 to £11,500, with a commitment to raise this to £12,500 by the end of parliament. The higher rate threshold will be increased to £45,000. The class 2 NIC will be abolished and there will be an increase in 4NIC to 10% from 2018, and 11% in 2019.
- IR35 – The responsibility for determining the application of IR35 to individuals working through their own company in the public sector will no longer sit with the individual, but move to a public sector body. Additionally the 5% tax free allowance for expenses will be removed and agency/ public sector can decides whether to take account of employees expenses before operating PAYE/NIC.
- Other employment Taxes – There will be a restriction on tax and NIC savings on benefits provided through salary sacrifice or where there is a cash alternative. Employer pension contributions, employer provided pension advice, childcare, cycle to work schemes and ultra-low emission vehicles will not be impacted by changes. These will also be an increase to the national living wage, for those aged over 25 from £7.20 per hour to £7.50.
- Globally mobile employees – Businesses (including landlords) will be able to make ‘pay as you go' tax payments if they maintain digital records and provide regular updates to HMR.
Douglas Todd, Indirect Tax Director finalised the morning with his summary of the need-to-knows when it comes to Indirect Taxation.
Minimum Excise Tax for cigarettes - Total excise duty on a packet of cigarette will be higher of MET or usual duty charge.
- Sugar Levy – A new for added sugar drinks with a total sugar content of 5g or more per 100ml will be set at 18p per litre, and those with 8g or more per 100ml will be set at 24p per litre.
- Holding companies and VAT – This is an area that has been on HMRC's radar for a number of years. Draft internal HMRC guidance attempts to clarify unclear issues/ areas of dispute from the RCB.
- Brexit Impact Assessment – PwC have created an online tool to help you understand how Brexit will impact your business and plan for a sustainable post-Brexit international trading model.
We took some time post event to gather feedback from the attendees. Here's what they told us:
‘Really good location, well organised event with great catering. The 5 speakers were extremely knowledgeable subject experts. It is highly convenient having it just a few days after the Budget is announced, and also a great way to network with other finance professionals.' – Natalie Floyde , Financial Controller
‘Very convenient event in a convenient location. It was a difficult budget to draw anything from – but the speakers drew attention to IR35, VAT and Pension Schemes as key stickling points.' – Taz Ghafoor, Finance Manager
‘The speakers were excellent. It's always worth coming down and getting the expert view on things. It's also a good opportunity to network with a lot of great people.' – David Bunyan, Group Financial Controller