24 things you need to know - Budget 2018
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Published 29 October 2018
The Chancellor has presented his
Budget to Parliament – here's a
summary of what was announced.
finances have reached a turning point
Since 2009-2010 the deficit has fallen by four-fifths, from 9.9% to
1.9%. Public debt peaked in 2016-17 and is now falling. On average,
spending on public services will grow 1.2% above inflation a year from
next year until 2023-24.
Employment is at a near record high and the OBR forecasts it is set to
The economy has grown every year since 2010, and is projected to
continue growing in each year of the forecast. The unemployment rate is
at its lowest for over 40 years, there are over 3.3 million more people
in work since 2010 and the OBR forecasts 800,000 more jobs by 2022.
3. National Living
Wage will increase to £8.21
From April 2019 the National Living Wage will increase from £7.83 an
hour to £8.21. This will benefit around 2.4 million workers, and is a
£690 annual pay rise for a full-time worker.
tax-free Personal Allowance will rise to £12,500
The Personal Allowance – the amount you earn before you have to
start paying income tax– will increase by a further £650 in April 2019
This rise comes a year earlier than planned, and will be maintained
in 2020. This means a basic rate taxpayer will pay £1,205 less tax in
2019-20 than in 2010-11.
The Higher Rate Threshold will increase from £46,350 to £50,000 in
The amount people will have to earn before they pay tax at 40% will
increase from £46,350 to £50,000 in April 2019.
This means that in 2019-20, there will be nearly 1 million fewer
higher rate taxpayers than in 2015-16.
£1.7 billion to increase existing work allowances in Universal Credit
Increases to work allowances will mean working parents and people
with disabilities claiming Universal Credit will be £630 better off
People will also receive extra help as they move from their existing
benefits to Universal Credit and there will be targeted support for
people repaying debts.
A new railcard for all young people aged 26 to 30, available nationally
by the end of the year
The first digital only railcard will offer up to a 1/3 off most rail
8. Fuel duty
will remain frozen for a ninth year
In 2019, fuel duty will remain frozen for the ninth year in a row,
saving the average driver £1,000 since 2010.
Short-haul rates of Air Passenger Duty will not rise
Short-haul rates of Air Passenger Duty will not rise for the eighth
year in a row, keeping costs down for 80% of passengers. Long-haul
rates will rise in line with inflation.
10. Duty on
beer, cider and spirits remains frozen
The cost of a pint of beer will be 2p lower than if duty had risen
NHS funding will increase, including more spending for mental health
The NHS is the public’s number one priority and the government will
increase its budget by £20.5 billion after inflation by 2023-24. Within
this, the NHS will increase mental health spending by more than £2
billion a year by 2023-24.
12. £650 million for social
care next year
Local authorities in England will receive a further £650 million in
social care funding next year.
Lifting the borrowing cap to allow local authorities to build more
From today in England the government is lifting the cap on the
amount of money local authorities are able to borrow to build housing.
Local authorities fund housing through a separate Housing Revenue
The Welsh Government is also taking immediate steps to lift the cap
This will be £10,000 for the average primary school and £50,000 for
the average secondary school.
A commemorative 50p Brexit coin will be available to buy from Spring
The Royal Mint will create a new commemorative Brexit coin to mark
the UK’s exit from the European Union.
Up to £19 million in commemoration of the Centenary of the WWI Armistice
Up to £8 million to help with the cost of repairs and
alternations to village halls, Miners’ welfare facilities and Armed
Forces organisations’ facilities.
£10 million to support veterans with mental health needs through
the Armed Forces Covenant Fund Trust.
£1 million for First World War Battlefield visits for school
17. £30 billion to improve roads
A £28.8 billion National Roads Fund, paid for by road tax, includes
£25.3 billion for the Strategic Road Network (motorways, trunk and A
roads). The largest ever investment of this kind.
It will also help fund the new network of local roads (known as the
Major Road Network), and larger local road projects.
Local authorities will receive £420 million to fix potholes on roads
and renew bridges and tunnels, and there will be a £150 million to
improve local traffic hotspots such as roundabouts.
money for Scotland, Wales and Northern Ireland
Scotland, Wales and Northern Ireland will all get more money to
spend in devolved areas, including education, health and housing. This
over £950 million more for the Scottish Government through to
over £550 million more for the Welsh Government through to
over £320 million more for a Northern Ireland Executive through
There will also be £150 million for a Tay Cities Deal, £120 million
for a North Wales Growth Deal, £350 million for a Belfast City Region
Deal and opening negotiations on Derry/Londonderry and Strabane City
19. Over £1.5
billion to support the high street
Small retail businesses will see their business rates bills cut by a
third for two years from April 2019, saving them £900 million.
Local high streets will benefit from £675 million to improve
transport links, re-develop empty shops as homes and offices and
restore and re-use old and historic properties.
Public lavatories will receive 100% business rates relief.
This adds to previous reductions in business rates since Budget 2016
which will save firms over £12 billion over the next five years.
billion more for defence over the next two years
The Ministry of Defence will receive an extra £1 billion to help
protect the UK against changing threats such as the rise in
cyber-attacks and the resurgence of state-based threats.
This funding adds to the £800 million announced earlier this year.
Increasing funding to help departments to prepare for Brexit to over £4
The government is providing £500 million of additional funding for
departments to prepare for Brexit for 2019-20. This is on top of the
£1.5 billion already announced for that year.
The Annual Investment Allowance will increase to £1 million from 1
January 2019 to 31 December 2020
The government will increase the Annual Investment Allowance
five-fold from £200,000 to £1 million to help businesses to invest and
Also, 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.
23. A 2%
digital services tax on large digital firms
From April 2020, large social media platforms, search engines and
online marketplaces will pay a 2% tax on the revenues they earn which
are linked to UK users.
Further changes to the apprenticeship levy to support employers
From April, large businesses will be able to invest up to 25% of
their apprenticeship levy to support apprentices in their supply chain.
Some employers will pay half of what they currently pay for
apprenticeship training – from 10% to 5%. The government will pay the
remaining 95%. We will announce further details on when this will be
available in early 2019.
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Article Published/Sorted/Amended on Scopulus 2018-10-29 00:00:15 in Tax Articles