“I present to the House a Budget for Britain’s future; a Budget that shows the perseverance of the British people finally paying off.” Philip Hammond, Chancellor of the Exchequer
The government promoted yesterday’s budget as the end to austerity. Did it deliver this promise?
Here’s a down-to-earth look at look at the key points that affect the Re:Accounts community:
Businesses and the Budget
- Annual investment allowance to be increased from £200,000 to £1m for two years (If this is tempting, please bear in mind that there are complex rules involved – we’re happy to chat them through with you.)
- Contribution of small companies to apprenticeship levy to be reduced from 10% to 5%
- Business rates bill for firms with a rateable value of £51,000 or less to be cut by third over two years
- Measure to benefit 90% of independent shops, pubs and restaurants, cutting bills by £8,000
- £900m in business rates relief for small businesses and £650m to rejuvenate High Streets
- Extending changes to the way self-employment status is taxed, from the public sector to medium and large private companies, from 2020
“Through the Budget, the Chancellor is now using the strength of the Treasury to back small business.” Mike Cherry, National Chairman of the Federation of Small Businesses
Boosting Personal Income
- The personal allowance threshold, the rate at which people start paying income tax at 20%, to rise from £11,850 to £12,500 in April – a year earlier than planned
- The higher rate income tax threshold, the point at which people start paying tax at 40%, to rise from £46,350 to £50,000 in April. After that, the two rates will rise in line with inflation – as people earn more, they will not automatically be dragged into a higher tax band.
- National Living Wage increasing by 4.9%, from £7.83 to £8.21 an hour, from April 2019.
“These changes should increase your income by £155 a year if you earn between £12,500 and £50,000, and an extra £566 if you earn between £50,000 and £100,000.” Emily Prior, Chartered Accountant, Re:Accounts
- All first-time buyers purchasing shared equity homes of up to £500,000 will be eligible for first-time buyers’ relief
- 4 million working families with children to benefit by £630 a year
- Beer, cider and spirits duties to be frozen
- Cost of a bottle of wine duty to rise by 8p, in line with inflation, in February
- Tobacco duty will continue to rise by inflation plus 2%
- Fuel duty to be frozen for ninth year in a row
“As at the last Budget, the duty on beer, cider, and spirits has been frozen, although there will be an increase on some high-strength drinks.” Kevin Peachey, BBC News
- a new tax on the UK revenues of digital services companies from 2020, applying to those with global sales of more than £500m per annum.
- an extra £20.5bn for the NHS over the coming five years
- additional funding to help welfare claimants transfer to Universal Credit
Are you wondering how the budget affects your business or tax liability? Talk to the friendly team at Re:Accounts. We’ll cut through the red tape and jargon to get to the real impact for you.