The 2018 budget was announced this week in a speech by Chancellor Philip Hammond. With any budget, some areas benefit more than others, so we’ve taken a look through the detail and have highlighted some key changes which we believe might be of interest to our customers.
The tax-free Personal Allowance will rise to £12,500
The Personal Allowance will rise from £11,850 to £12,500 on 6 April 2019. This change was due to come into effect in 2020 but will be implemented in 2019 and will be held at this level in 2020. This affects all taxable income, which includes employment and pension income, as well as earnings from
Higher Rate Threshold set to increase from £46,350 to £50,000
The Higher Rate Threshold will go up by £3,650 (a 7.8% increase) on 6 April 2019, meaning that people will now be able to have a taxable income of £50,000 before they pay tax at 40%.
Fuel duty will remain frozen for a ninth year
With petrol prices recently reaching the highest they have been in four years , this point in the budget may come as some respite for motorists.
Short-haul rates of Air Passenger Duty
Air Passenger Duty rates on short-haul flights will be held steady for the eighth year in a row, benefitting 80% of passengers. Whilst long-haul rates will rise, the increase will be in line with inflation.
Lifting the borrowing cap to allow local authorities to build more housing
Whilst developers will still need to go through the standard planning permission hurdles that are associated with building new homes, from 29 October 2018, the government is lifting the borrowing cap in England which will increase the amount local authorities are able to borrow to build housing.
The Welsh Government is taking immediate measures to remove the cap in Wales.
Up to £19 million in commemoration of the Centenary of the WWI Armistice
A combined total of up to £19 million has been committed to mark 100 years since the end of the First World War. Up to £8 million will be available to help with the cost of repairs to village halls, Miners’ facilities and Armed Forces organisations’ facilities. £10 million will support veterans with mental health needs, and £1 million will fund First World War Battlefield visits for school students.
Billions committed to improving roads
£28.8 billion has been committed to the National Roads Fund, paid for by road tax, the largest ever investment of this kind. This figure includes £25.3 billion for the Strategic Road Network which addresses motorways, trunk and A roads; it will also help fund the new network of local roads and larger local network projects.
In addition, local authorities will receive an extra £420 million to fix potholes and renew bridges and tunnels, and £150 million to improve local traffic hotspots such as roundabouts.
Over £1.5billion to support the high street
Whilst the government is limited on helping high street shops with their rent costs, they can help them in other areas. Small retail businesses will see their business rates bills cut by a third from April 2019, for two years, saving them £900 million.
Transport links will be improved using a budget of £675 million which will benefit local high streets.
This money will also be used to re-develop empty shops as home and offices and to restore and re-use old and historic properties.
Increasing funding to help departments to prepare for Brexit to over £4 billion
Unsurprisingly, Brexit received some attention from the 2018 budget with £500 million of additional funding being provided to departments to prepare for Brexit for 2019-20. This brings the total budget for Brexit for 2019-20 to £2 billion.
A commemorative 50p Brexit coin will be available to buy from Spring 2019
One for the coin collectors; the Royal Mint will create a new commemorative coin to mark the UK’s exit from the European Union. On the topic of Brexit, Hammond has cautioned that should a successful deal with the EU not be reached ahead of Brexit, he may have to deliver an unscheduled emergency Budget and revise the plans announced this week.
Investment Marketing Team