In our roundup of Budget 2018 essentials, we review the key tax measures for businesses and individual taxpayers, from a time-limited hike in annual investment allowance to £1m, retention of entrepreneurs’ relief, frozen VAT threshold, a digital services tax for tech giants and an unexpected increase in the personal allowance
Business tax reliefs - fivefold AIA hike, entrepreneurs' relief tightened
Targeting business growth, in Budget 2018, the Chancellor Philip Hammond announced increases to business tax reliefs to stimulate investment and innovation, with the annual investment allowance hiked for a two-year period and entrepreneurs' relief retained although the qualifying rules have been strengthened.
The annual investment allowance has been increased on a temporary basis from £200,000 to £1m, until January 2021, a measure which will cost around £1bn over the two-year period.
Following strong lobbying against a possible abolition of entrepreneurs’ relief, the Chancellor Philip Hammond committed to retaining entrepreneurs’ relief. However, he tightened the rules stating that beneficiaries of entrepreneurs’ relief would have to be involved in the business for a minimum of two years to meet the qualifying criteria.
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