Top 8 Budget 2018 things you need to know
Did the 2018 Budget do anything for you? The speech in itself was not that interesting and much of what Hammond said was big picture stuff, that whilst important, did not feel that the Budget was particular focussed on the individual.
So, what do you need to know. Here’s a quick run through of what was announced.
1. UK growth upgraded
Independent body the Office for Budget Responsibility (OBR) has increased its projections for UK GDP growth forecasted to be 1.6% in 2019 and beyond. This is up from March expectations of 1.3%. Predictions for 2020 and 2021 remained the same at 1.4%.
2. Brexit planning
Hammond said he was “confident” of securing a deal between the UK and EU, however he added he was not being “complacent”. He did however add that he is increasing the amount of spending for no-deal planning to £2bn, while he will also take “whatever action is appropriate” if the events changes.
The chancellor has already warned there will be an Emergency Budget in the event of a no-deal Brexit on 29 March 2019.
3. End of austerity
Hammond announced “the end of austerity” in his speech, after eight years of Conservative government. Furthermore he added that “the tough decisions of the past eight years were not driven by ideology, they were driven by necessity. The era of austerity is coming to an end,” he said.
4. Tax on the FAANGs
The chancellor also announced the introduced a UK Digital Services Tax on “tech giants” with global revenues of over £500m a year, such as Facebook and Amazon. The tax, which is set to be introduced in April 2020, is expected to raise £1.5bn over four years.
5. Infrastructure spend increase
Hammond also announced plans to increase infrastructure spend with £420m made available “to tackle potholes, bridge repairs, and other minor works in this financial year”.
He also announced that he would end the use of private finance initiatives (PFI), which allow private companies to finance public investments.
6. NHS boost
the chancellor announced that he would fulfil Prime Minister Theresa May’s promise in June to increase NHS spending. The government is set to provide an addition £20.5bn to the NHS over the next 5 years, which will also see the launch of a new mental health service.
7. Stamp duty relief extended
Hammond also extended stamp duty relief for the second year running, now including first-time buyers of shared ownership properties valued up to £500,000.
The chancellor added he would make the relief “retrospective” and would apply it to any first-time buyer who has purchased a property since the last Budget.
8. Increase in personal allowance a year early
The Chancellor said he would bring forward an increase to the income tax personal allowance and higher rate threshold by a year to April 2019. Plans to increase the personal allowance to £12,500 and the higher rate to £50,000 by 2020 – announced in May 2017 – will be from April 2019 instead.
Currently, the personal allowance is £11,850 and the higher rate £46,350.
On the face of it, not all that exciting and nothing that much for personal savers and investors to get excited about. Rumours were abound that pension allowances and tax relief may have been altered, however Hammond did not mention anything in his speech.
Further study of the Red Book and full details of the Budget will come out in the next week or so and more detail is likely to appear.
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