“The Era of Austerity is Finally Over”
The Chancellor has announced the last Budget before Brexit. It is a Budget of no surprises.
Theresa May had already revealed the main “rabbit in the hat”, a £20 billion-a-year increase for the NHS over the next 5 years. This will be honoured by the Chancellor, along with the promise that austerity will finally be over.
The Chancellor has called this a Budget for hard-working families. Following good news from the OBR, which reported borrowing £13 billion lower than forecast in March, some of the pressure was off for Mr Hammond.
One of the most high-profile announcements by Mr Hammond is a new digital services tax – dubbed the ‘Amazon tax’ by the media. Targeted at large companies, the tax has been set at 2% of revenue derived from UK users through use of things such as search engines, social media platforms and online marketplaces.
Coupled with this tax, and with the UK high street reeling from various high-profile company failures, the Chancellor also announced a cut in business rates for smaller retail businesses. From April 2019 retail property with a rateable value below £51,000 will see their bills cut by one third. Local newspapers will receive a further £1,500 discount and even public lavatories will have a new 100% relief.
Not content with appealing to small businesses and the high-street, Mr Hammond also sought to win favour with larger-than-expected increases to the personal allowance and higher rate threshold. Originally a part of the Conservative manifesto, the increases have been brought forward by a year. From April 2019 the personal allowance will increase to £12,500 and the higher rate threshold will be raised to £50,000.
We have put together our Budget report to summarise the key announcements that have been made.
If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the Budget, please call us to discuss them.
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AUTUMN BUDGET REPORT 2018
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