Summary of Budget 2018
On Monday 29th October 2018 the Chancellor of the Exchequer, Philip Hammond delivered his 2018 Budget in a 72 minute speech! But don't worry we have not written everything in chapter and verse.. here are 24 key points you may need to be aware of;
1. Public 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, spen
ding on public services will grow 1.2% above inflation a year from next year until 2023-24.
2. Employment is at a near record high and the OBR forecasts it is set to keep growing 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.
4. The 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 to £12,500.
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.
5. The Higher Rate Threshold will increase from £46,350 to £50,000 in April 2019 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.
6. £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 each year.
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.
7. 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 travel.
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.
9. 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 by inflation.
11. 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.
13. Lifting the borrowing cap to allow local authorities to build more housing 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 Account (HRA).
The Welsh Government is also taking immediate steps to lift the cap in Wales.
14. £400 million extra for schools this year This will be £10,000 for the average primary school and £50,000 for the average secondary school.
15. A commemorative 50p Brexit coin will be available to buy from Spring 2019 The Royal Mint will create a new commemorative Brexit coin to mark the UK’s exit from the European Union.
16. 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 students.
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 o
f 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.
18. More 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 Budget means:
over £950 million more for the Scottish Government through to 2020-21
over £550 million more for the Welsh Government through to 2020-21
over £320 million more for a Northern Ireland Executive through to 2020-21
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 Region Deal.
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.
20. £1 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.
21. Increasing funding to help departments to prepare for Brexit to over £4 billion 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.
22. 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 grow.
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.
24. 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%.