The budget can be mind-boggling. In today’s post, we’ve plucked out the key points that are most likely to affect you.
- Slow growth, revised from 2% to 1.5% this year (Hammond was close-lipped about the causes for the slowing economy, but many blame Brexit concerns. There is a clear and sobering decline in UK productivity.)
- More borrowing compared to original goals – £49.9bn less this year, instead of previous goal of £58bn less. (The Conservatives are still staying good to their promises of lowering the UK deficit, but the budget indicates the reduction will be at a slower pace than originally intended.)
- £400m for infrastructure to charge electric cars
- No taxes for charging electric vehicles at work.
- 1 percentage point increase in taxes on company diesel cars
- From 2018, a tax increase on diesel cars that don’t meet standards
- New railcard to be available to 4.5 million people aged 26-30
- Increase on air passenger duty on premium class tickets.
- Rise in fuel duty cancelled.
- £1.5bn to repeal the 7 day waiting period
- New claimants in receipt of housing benefit will get it for two weeks.
(An expensive move, but a step towards increased fairness that campaigners have been asking for.)
- Up to £7.83 from £7.50 – still below the ‘real living wage’ of £8.75
- Personal allowance rises to £11,850 from April;
- Higher rate (40%) threshold increases to £46,350.
Alcohol and tobacco
- Spirits wine and beer – Frozen.
- Higher strength white cider – increase via new legislation.
- Tobacco duty will rise by 2% above inflation
- Minimum excise duty on cigarettes and hand-rolled tobacco will also rise
- Rises in business rates to be linked to CPI measure of inflation, not RPI
- Staircase tax: businesses hit will have original bill reinstated.
- Discount for pubs (rateable value less than £100,000) extended by one year to March 2019.
- Consultation on the Small Business VAT threshold, currently £85,000
(After repeated calls to lower the threshold, Hammond has opted instead to start a consultation on the matter.)
- Stamp duty abolished for first time buyers on homes up to £300k.
- 100% council tax premium on empty properties.
- £28m in three new housing pilots – in the West Midlands, Manchester and Liverpool – to halve rough-sleeping by 2022.
- £44bn for capital funding to help build 300,000 homes annually by 2020, and five new garden towns.
- £8bn of financial guarantees to support private building.
- £2.7bn housing infrastructure fund.
- £34m for construction skills.
As experienced accountants and business advisors, we can tell you exactly how the budget is likely to affect your business. Contact us at your convenience for a more detailed discussion on what you can expect.