2018 Autumn Budget: The Last Budget Before Leaving The EU
The 2018 autumn budget has been released by chancellor Phillip Hammond, making this the last budget before Britain leaves the European Union.
In this article, we will be rounding up the key announcements of the 2018 autumn budget.
Tax Rates & Bands
Chancellor Phillip Hammond announced he will be pushing on with increasing the basic tax rate threshold. The current basic rate is at £11,851, that will now be boosted to £12,500. On top of this, the ‘higher rate’ will go up from £46,351 to £50,000.
Although this is a strong benefit for many workers in the UK, it will cause a downfall for pension savers, as the result of increasing the tax band will mean that previously higher-rate taxpayers will fall into the basic rate tax bracket.
The UK’s slow productivity growth has been spoken about for many years now by economists. This is often related to the equally slow growth of wage. Chancellor Hammond states that through capital investment, which they predict will total 2.2% of GDP, the slow pace of productivity growth will actually reverse within the next 5 years.
In the 2018 Autumn budget, the largest roads investment package was confirmed. Just under £30 billion will be put into upgrading and building new roads to improve the UK’s road network.
An additional £90 million will be invested in the creature of ‘future mobility zones’. This entails new transport modes, services and digital payments and ticketing.
High Street retailers have seen the large impact of E-commerce over the last 10 years, decreasing sales in brick and mortar stores.
In order to reverse this trend, chancellor Hammond has announced that around half a million small retailers will be eligible to business rates relief. A future high street fund will be created with the investment of £675 million to improve high streets.
In the latest budget, the chancellor announced a cut to stamp duty for first-time buyers of homes worth up to £500,000. As well as this, a further £500 million is being put into the Housing Infrastructure Fund, which will help to build up to 650,000 homes.
Phillip Hammond stated, “We can’t resolve the productivity challenge or delivery the high standard of living the British people deserve without fixing our housing market.” This is great news for first-time buyers.
Big tech companies
Despite the absence of an international agreement, the chancellor announced that the UK will push ahead, taxing technology giants that the government believe to be paying less than their fair share of revenue.
The tax, says Hammond, will only be targeting large and established tech companies with global revenues of at least £500 million. It is expected to raise around £400 million per year for the government.
The chancellor claims that the tax will not be felt by consumers, however, there is a possibility that the tech companies will move aboard to avoid the extra taxes that they will need to pay.
Understanding how the 2018 Autumn budget will affect your business
In the last UK budget before leaving the EU, there were some positive wins for first-time buyers and SMEs. It seems the Chancellor may have gained some positive views. If you are unsure how this will affect your business please give the team a call on 01733 265 888.