What are the most relevant points to small businesses in 2018 budget?


Income tax

Personal allowance will increase to £12,500 (current level £11,850) from April 2019, and higher rate threshold will increase to £50,000 (current level £46,350), and they will remain at this level for the 2020-21 tax year.

Pension and savings tax

Pension lifetime allowance will increase to £1,055,00 from April 2019, in line with CPI.

Adult ISA subscription limit remains at £20,000, but junior ISA subscription limit will increase to £4,368, in line with CPI.

Entrepreneurs’ relief

Qualifying period for entrepreneurs’ relief will increase from 12 months to 24 months

Business rates

Business rate bills will be cut by one-third for retail properties with a rateable value below £51,000 for two years from April 2019.


VAT registration threshold will be frozen at £85,000 for two more years.

Property tax

Stamp duty discount for first time buyers will extend to shared ownership houses and back date to 2017. First time buyers (shared ownership and 100% ownership) who bought:

  • On or after 22 November 2017
  • House costing no more than £500,000

will pay no stamp duty on the first £300,000 of the property’s value and 5% on the remainder up to £500,000.

Houses costing more than £500,000 will have no stamp duty relief. Standard rates apply.

Capital gains tax

The final period exemption will be reduced from 18 months to 9 months from 2020.

NIC Employment Allowance

From 6 April 2020, £3,000 only applies to smaller employers with NIC bill below £100k.

R&D Tax Credit

From 1 April 2020, change on SME scheme to limit payable tax credit to 3 times company’s total PAYE and NIC costs for the period.

Click here for the full budget document.