1 week ago
As we’re all aware, on Monday 29th October, Chancellor Philip Hammond delivered the final budget before we leave the European Union in March 2019. To save you the time of sifting through the finer details, here’s a summary of the key announcements.
The Chancellor mentioned that austerity is ‘finally coming to an end’ and presented some positive forecasts for the coming year post Brexit. Forecasts of growth show an average increase of 1.5% each year for the next 5 years.
The national borrowing in 2018 has been £12bn less than forecasted and planned to come down to £19.8bn in the next five years.
An additional 3.3 million more people are employed and in work since 2010 with a further 800,000 more jobs forecasted by 2022.
But what does it mean for us?
The government (a year early) have increased the amount you can earn in a year tax free by £650 to £12,500. In normal circumstances this is what you will see on your payslip as your tax code 1250L.
The higher rate tax threshold has been increased from £43,350 to £50,000. Therefore people won’t start paying 40% tax until this point.
This seems slightly favourable to those falling within the higher rate tax bracket, however what the chancellor didn’t declare on TV was that there are some changes to the National Insurance allowances for the higher tax rate payers which will hit them by some £500.
NATIONAL LIVING WAGE
The national living wage has been increased from £7.83 to £8.21 per hour.
FOR THE DRINKERS
Tax/duties have been frozen.
FOR THE SMOKERS
Another increase in tax on cigarettes of inflation + 2% (Likely to be 33p increase in a pack of 20).
FOR THE DRIVERS
Tax / duties on fuel to be frozen again. Local councils will receive an extra £420m to tackle potholes.
FOR THOSE WANTING TO BUY A HOUSE / RENT THEIR PROPERTY
Additional funding of £500m to help build a further 650,000 new homes.
If you are looking at becoming a first time buyer in a shared equity home (up to £500,000) you will qualify for first time buyer’s relief and not have to pay stamp duty.
Letting relief of £40,000 when letting your residential property has been scrapped, and the term of 18 months has been reduced to 9 months of letting.
FOR THE BORROWERS
Those throughout the country who are suffering financial difficulty will be given extra breathing space before legal action is taken against them if they are struggling to make repayments on outstanding debt. The period has increased from six weeks to 60 days.
FOR THE SAVERS
The old NS&I product (that hasn’t been sold since 2011) will attract a much reduced rate of return when they are due to mature.
FOR THE SHOPPERS
Attempts to rejuvenate the high street have been made by spending effectively £900m on cutting business rates bill on properties that have a rateable value of below 51,000. (Unlikely to be enough to save large companies than have gone bust over recent years such as Toys R Us, Woolworths and Maplin. The properties they have will be far more valuable than 51,000. This is most likely help small businesses in local towns and cities).
FOR THOSE WITH KIDS
Work allowances for Universal Credits to be increased by £1.7bn a year. Meaning 2.4 million working families with children to benefit by some £630 a year.
FOR THE SELF EMPLOYED
Changes enforced on those who claim to be self-employed through a personal service company (who are effectively employees). They will pay more tax and NI by way of enforcing large and medium businesses to take responsibility of their employment status.
Annual Investment Allowance has increased from £200,000 to £1m for the next two years. This gives companies an incentive to invest in new technology / equipment up to the value of £1m while able to recognise full tax relief in that year. Whilst also implementing a new 2% Digital Tax to be levied against big technology companies from April 2020. This tax will be based on UK revenues and not profits declared within the UK.
An extra £900m in business rates relief for small businesses and £650m to rejuvenate High Streets.
FOR THE NHS
An additional funding of £20.5bn for the NHS over the next five years and a minimum of £2bn / year for mental health services.
FOR THOSE STILL READING:
– Business rates cuts on public toilets – likely to see the withdrawal of having to pay for the usage.
– An extra £160m for counter terrorism police.
– An extra £1bn for armed forces / cyber-capabilities.
– £10m for mental health care for veterans.
– £1m to fund school trips to World War One battlefields.
– £1.7m in Holocaust education programmes.
– Extra £700m for councils to care for the elderly and those with disabilities.
– £10m for air ambulances.
– A one off £400m bonus to schools to help buy extra things they need.
– Those travelling from USA/Canada/New Zealand and Australia will be able to use e-passport gates (not just those travelling in Europe).
– £60m in planting trees.
And breathe! A little shorter than Mr Hammond’s statement I suppose – but hopefully a little more easily digestible.
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