The Chancellor Philip Hammond today delivered his Autumn Budget. Whilst this has fallen earlier in the year than previous announcements in order to allow for the ongoing Brexit negotiations, there were more measures announced in his speech than we possibly expected.
Our specialist tax and VAT partners from around the UK watched the announcement and have distilled the main proposals into an ‘at a glance’ format, to help you see the points that matter most to you.
Download our UHYView document below to see their immediate reactions to some of the proposals.
Here are the key points of his speech.
- UK economy grew by 1.7% in real terms in 2017
- Growth increased to 0.4% in Q2 2018
- GDP forecast to grow by 0.4% in Q4 2018
- Annual GDP growth of 1.3% in 2018 and 1.6% expected in 2019
- GDP growth forecast to dip to 1.4% in 2020 and 2021, increasing to 1.6% by 2023
- The OBR forecasts productivity growth of 0.8% in 2018 and 2019, expected to increase to 0.9% in 2020, and then to 1.2% in 2023
- National living wage to increase from £7.83 to £8.21 from April 2019
- Extension to Entrepreneurs’ Relief qualifying period, from 12 to 24 months
- Increase in Annual Investment Allowance from £200k to £1 million for all qualifying investment in plant and machinery made on or after 1 January 2019 until 31 December 2020
- From October 2018 businesses will be able to deduct 2% of the cost of any new non-residential structures and buildings off their profits before they pay tax
- Some employers will see a reduction in their contribution to costs of apprenticeship training from 10% to 5%
- The VAT threshold will be maintained at the current level of £85,000 for a further two years until April 2022
- The tax-free personal allowance will rise by £650 to £12,500 from April 2019
- The Higher Rate Threshold will increase from £46,350 to £50,000 in April 2019
Property and construction
- Stamp Duty Land Tax (SDLT) relief for first time buyers extended to shared ownership properties
- From April 2020 lettings relief will be reformed so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant
- The cap on borrowing for local authorities to build housing is being lifted from today
- Private residence Capital Gains Tax – final exempt period to be shortened from 18 months to 9 months
Automotive and transport
- Fuel duty to remain frozen in 2019 for the ninth consecutive year
- £420 million to fix potholes and roads and renew bridges and tunnels
- Vehicle Excise Duty from 1 April 2019 will increase in line with RPI for cars, vans and motorcycles
- £400 million extra for schools, representing an extra capital payment averaging £10,000 for a primary school and £50,000 for a secondary school
Health and social care
- An increase to the NHS budget by £20.5 billion after inflation by 2023/24
- £2 billion a year in spending on mental health services within the NHS by 2023/24
- Further £650 million in social care funding next year
We will also be issuing a complete summary of the 2018 Budget tomorrow, which will offer a clear and concise commentary of the main proposals, focusing on the issues pertinent to you, your family and your business.