New tax and business measures come into effect
Following the beginning of the 2017/18 tax year, a range of new tax and business measures have come into effect.
The introduction of the new Apprenticeship Levy is amongst these new measures. This forms part of a government target to create three million new apprenticeships in England by 2020. The Levy requires employers with annual pay bills of over £3 million to invest a percentage of their yearly pay bill in apprenticeships.
Additionally, from 6 April individuals are able to open up and save into a Lifetime ISA. This type of ISA is available to any adult under the age of 40, and can be used to deposit up to £4,000 per tax year. Consumers will receive a 25% government bonus on any savings put into the account before their 50th birthday.
The tax-free savings and the bonus can be put towards a deposit for a first home in the UK worth up to £450,000 at any time, from 12 months after having first saved into the account.
Meanwhile, from April, the tax and employer advantages of certain salary sacrifice schemes have been removed. This means that employees swapping salary for benefits will pay the same tax as individuals who buy them out of their post-tax income. Some workplace benefits are exempt from the changes: these include pension contributions and arrangements, childcare vouchers, workplace nurseries and ultra-low emission cars.
However, the British Chambers of Commerce (BCC) has warned that businesses may be ‘hit by upfront costs’ following the beginning of the new tax year. Suren Thiru, Head of Economics at the BCC, commented: ‘While corporation tax is decreasing, companies are more concerned about the escalating burden of input costs which hit firms before they even turn over a single pound.
‘Such costs are likely to cause many firms to implement cost reduction measures and weigh down on firms’ ability to invest, recruit and grow their business.’