Self-proclaimed ‘Fiscal Phil’ delivered his 2018 Budget recently, and it appears that Christmas has come early from the spending spree that ensued.
His 5-year plan promises to bring an end to austerity and touched on everything, from high-streets to pot-holes and everything in between.
- The Chancellor confirmed the UK has enjoyed 8 straight years of economic growth with over 3.3 million Brits in employment and envisions that this ‘jobs miracle’ is set to continue.
- The Personal Allowance threshold has been increased a year earlier than planned. From April 2019 the threshold will increase to £12,500.00 for basic rate tax payers and £50,000.00 for higher rate tax payers. Whilst good news for all, this certainly favours those whose incomes are above average. Basic rate taxpayers will be £130 a year better off whilst those earning £50,000 will make a far greater saving keeping an extra £860.
- Employer’s contribution to the apprenticeship levy for smaller firms will decrease from 10% to 5% in a £695m package to support apprenticeships.
- From April the National Living Wage will rise by 4.9% from £7.83 to £8.21 which will result in a full-time worker receiving around £690.00 annual pay increase. This arguably puts extra stress on smaller employers to accommodate the 38p hourly increase for numerous employees.
- With the previous scrap in Stamp Duty for first time buyer’s successfully resulting in 121,501 first time buyer’s since the abolishment, the Chancellor has additionally scrapped stamp duty for first time buyers of shared ownership properties up to a value of £500,000. The Chancellor will apply this change retrospectively so all those who have completed and paid stamp duty on their shared ownership property since the previous budget (last November) is entitled to a refund. Buy-to-let landlords were
- £500m will be available for the Housing Infrastructure Fund, designed to enable a further 650,000 homes to be built. With guarantees of up to £1bn to be made available for smaller house-builders.
- New partnerships with housing associations in England will enable a further 13,000 homes to be delivered.
- Lettings relief will be limited to properties where the owner is in shared occupancy with the tenant. Buy-to-let landlords were spared of any further tax detriments in this budget.
- With a hope of rejuvenating our High Streets, business rate bills cut by one-third for the next two years for all retailers in England with a rateable value of £51,000 or less, delivering an annual saving of up to £8,000 for up to 90% of all independent shops, pubs, restaurants and cafes. A new 100% mandatory business rates relief will be instated for all lavatories made available for public use. However in light of the National Living Wage increasing, it is arguable as to whether Britain’s retailers will truly be unburdened.
- Start-Up Loans funding will be extended to 2021, helping around 10,000 entrepreneurs.
- The minimum qualifying period for entrepreneurs relief will be extended from 12 months to 2 years to ensure the system is not abused.
- New 2% digital services tax on UK revenues of big technology companies, from April 2020. Profitable companies with global sales of more than £500m will be liable.
This article was written by Emel Hamit, Trainee Solicitor at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of October 2018.