The beginning of the new financial tax year in April will see a range of changes to the way businesses and households are taxed.
There are a number of important changes to be aware of.
Plans are set to be unveiled on the business rates revaluation where business will receive lower bills that reflect the changes in their local property market.
From April 2017, local authorities will be allowed to retain 100% of the business rates if they have a rateable value below £12,000.
A traditional relief worth £3.6 billon will also be phased in over a 5 year period for increased business rates bills.
Dr Adam Marshal, director general at British Chambers of Commerce, said the government should use the upcoming Spring Budget to save businesses from large costs:
“We’re calling for steps to be introduced which would help alleviate some of the excessive pressure put on businesses by rates.”
The Lifetime ISA will be available to individuals aged between 18 and 40 from 6 April 2017.
People can open an account and make annual contributions of up to £4,000 per year while receiving a 25% government bonus.
Funds can be withdrawn any time before the age of 60 to buy a first home or save for retirement.
However discussions continue on whether the Lifetime ISA will be a valuable addition to retirement saving compared to workplace pensions.
Steven Cameron, pensions director at Aegon, said:
“For employees saving for retirement, workplace pensions almost always offer greater incentives than the Lifetime ISA 25% bonus.”
An additional ‘residence nil-rate band’ will be introduced from 6 April 2017 for those passing on a main home to a direct descendent.
The allowance is an addition to the existing tax-free inheritance tax allowance (£325,000). This starts at £100,000 and will increase by £25,000 each tax year until it reaches £175,000 in 2020/21.
Commenting on the rules, Sean McCann, chartered financial planner at NFU Mutual, said:
“The chancellor should look to simplify this already deeply unpopular tax rather than allowing layers and layers of complexity to continue to bamboozle people.”