LATEST NEWS

The budget boiled down - how will it affect you?

 

The budget can be mind-boggling.  In today’s post, we’ve plucked out the key points that are most likely to affect you.

 

The Economy

  • 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.)

 

Transport

  • £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.

 

Universal credit

  • £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.)

 

Living wage

  • Up to £7.83 from £7.50 – still below the ‘real living wage’ of £8.75

 

Income tax

  • 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

  

Business rates

  • 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.

 

VAT

  • 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.)

 

Housing

  • 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.

 

 

 


 

Services for the hospitality sectorTax services