0800 140 4644
It’s taken three Autumn Statements from the current Chancellor of the Exchequer, so I bet Philip Hammond’s been bursting to make the announcement that austerity is coming to an end. With an economic forecast better than expected and receipts from taxes also increasing, the Chancellor was feeling confident enough to increase spending.
Even with Brexit looming ever closer, growth for 2019 is predicted to be 1.6%, an improvement on this year’s 1.3%. It’s predicted to be at 1.4% in 2020 and 2021 and then rise again in 2022 to 1.5%.
I’m never entirely sure where the Treasury gets these figures from, however the belief that public finances are approximately £1.2bn better off than expected has let the Chancellor announce some significant new spending that could benefit businesses, public services and you as individuals.
There is some positive news from the Autumn Statement, but I wouldn’t say it’s a vote winner, so it’s lucky the Government is in the middle of their current fixed term.
The Budget for individuals
Some of the highlights the Chancellor announced will affect us personally. These include:
- The income tax personal threshold allowance will rise from £11,850 to £12,500 in April 2019. This is a year earlier than previously announced.
- The higher rate income tax threshold will rise from £46,350 to £50,000 in April.
- National living wage will increase from £7.83 to £8.21 an hour, an increase of 4.9%, from April 2019.
- For first time home buyers purchasing a shared ownership property, stamp duty relief is rising from £300,000 to £500,000.
The Budget for business
Highlights for businesses in the budget are:
- Businesses with a rateable value of £51,000 or under will have their bill cut by a third over a two-year period. This could lead to savings of up to £8,000.
- The retail sector has been finding times are hard, so the Chancellor’s announcement that £675 million of co-funding for local councils will go towards helping to plan the future of their high streets, may offer some ray of hope that they haven’t been
- Small businesses have had their contribution to the apprenticeship levy cut from 10% to 5%.
- The annual investment allowance to be increased to £1 million, from £200,000, for two years.
- VAT thresholds will remain at £85,000. This is significant as this threshold affects those who are affected by the Making Tax Digital rollout. There had been some speculation that the VAT threshold may be lowered, therefore requiring more businesses to register, but this hasn’t happened. Making Tax Digital comes into force from April 2019 for all VAT registered businesses with turnover above the £85,000 VAT threshold. For income tax, and corporation tax, it comes into effect in April 2020. See more information here https://bira.co.uk/budget-2018-provides-clarity-making-tax-digital-vat-threshold/
Other Budget highlights
- The NHS will receive an extra £20.5 billion over the next 5 years.
- Extra money has been set aside for Universal Credits. £1 billion over five years was announced to fund top-up payments for those transferring onto universal credit from other benefits.
- Work allowances, which is how much people can earn before they start to lose their benefits – will increase by £1,000 a year, giving some an extra £630 a year.
- Fuel duty has been frozen for the ninth year running.
- Schools budgets receive a one-off extra £400 million.
- Defence will receive £1bn to help build cyber capabilities and the Police an extra £160m for counter terrorism.
- An extra £500 million has been set aside for Brexit preparations.
The budget has presented individuals and businesses with some positive news. If you’d like to discuss how the budget announcements may affect you or your business, and how you may benefit from some of the budget changes, Black and White Accounting can help you get the most from your finances. Contact us today or ring 0800 140 4644 to find out more.
