Summary of Budget 2018

6 months ago

Autumn Budget Summary

Philip Hammond during his budget update focused on areas such as Brexit, the increased expenditure planned in the NHS, updates on the tax system and preparing the country for what he says is a ‘new chapter’ for the economy.

The Conservative government has reiterated that the ‘era of austerity is coming to an end’. This statement is supported by the drastic fall in the country’s deficit from 9.9% in 2009-10 to 1.9% currently.

Employment rates are at a near record high, with unemployment rates at their lowest in over 40 years.

 

Here are some of the key points from the budget update:

IR35:

IR35 reforms have finally been confirmed to affect the private sector, however the introduction will be delayed until April 2020 and will only affect large and medium sized businesses.

 

Personal:

From April 2019 the National Living Wage will rise from £7.83 to £8.21

Personal Allowance to increase from £11,850 to £12,500 in April 2019

Higher rate threshold to increase from £46,350 to £50,000 in April 2019

There will be an extension to the qualifying period of Entrepreneurs relief from 12 months to 2 years

 

Business:

Employment allowance for Employer’s National Insurance is to be revised for larger firms

VAT threshold to remain unchanged at £85,000 for the next 2 years

Increases in the annual investment allowance from £200,000 to £1 million for the next 2 years

Level of contributions made by small companies to the apprenticeship levy to be reduced from 10% to 5%

 

Brexit:

The chancellor confirms the government have reached a pivotal moment in Brexit negotiations and are confident of a good deal, however funds have been set aside to cover all eventualities totaling £2.2 billion

Increase in funding to help departments to prepare for Brexit to over £4 billion

 

NHS:

The NHS 10 year plan will include a mental health crisis program with new mental health crisis services in every A&E

£10 million in funding available for air ambulance

Budget to increase by £20.5 billion after inflation by 2023-24

£650 million in funding for local authorities for social care

 

Universal credit:

£1.7 billion in funding to be provided to existing work allowances in Universal Credit

Individuals claiming Universal Credit will receive £630 more per year due to increases to work allowances

 

Armed Forces:

£1 billion extra in funding is to be provided to the Ministry of Defence to assist in the protection against online cyber threats and the resurgence of state based threats

 

Counter terrorism:

£160 million to be spent in aid of Counter-Terrorism police funding

 

Public services:

£400 million one off capital payment directly to schools: this will average at £10,000 per primary school and £50,000 to each secondary school

£420m to local highway authorities to tackle pot holes and bridge repairs

 

High Street:

Councils to be provided with funding of £675 million which will benefit local high streets in redevelopment and improvement of stores and transport links

Business rates to be reduced by a third beginning April 2019 for two years, this will affect small retail businesses saving circa £900 million

 

Housing Relief:

Stamp duty to be extended to first time buyers of share ownership properties schemes up to £500,000

£500 million in housing infrastructure find to unlock 650,000 homes

 

Others:

Fuel duties to be frozen for the 9th successive year

Tobacco duties continue to rise at inflation plus 2%

Duties to be frozen on beer, cider and spirits for a year to support pubs

New rail card to be introduced to save young people, aged between 26 and 30, a third off rail fares

Short-haul rates of Air Passenger Duty will not rise, whereas long-haul rates will rise in line with inflation.

 


Published:  29th October 2018

Theo Parkinson

Theo Parkinson

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