The
Budget 2018 has been released. The chancellor has put together how money will
be spent for the forthcoming future. It is looking positive as there are
predictions that the economy will grow as the forecast for 2019 raised from
1.3% to 1.6% and annual forecasts raised to 1.4% in 2020 and 2021, 1.5% in 2022
and 1.6% in 2023.
This
Government has prioritised getting people into work as the best way to help
people is to provide them with stability and a pay packet every month. Since
2010 over 3.3 million more people are in work and predicting 800,000 more jobs
by 2023.
To
provide the jobs, you will need businesses, and therefore the Chancellor has
vowed to back another 10,000 entrepreneurs by extending Start-Up Loans funding to
2021 and following representations from the FSB, extending the New Enterprise
Allowance. Which will provide mentoring and support for benefit claimants to
get their business ideas off the ground.
UK
to be in the digital era
Digital Platforms delivering search engines, social media, and
online marketplaces have changed our lives. Digital platform businesses can
generate substantial value in the UK without paying tax here in respect of that
business and to make this fair, there has been an introduction of UK Digital
Services Tax.
This will be a narrowly-targeted tax on the UK-generated
revenues of specific digital platform business models. It will be carefully
designed to ensure it is established tech giants – rather than the tech
start-ups - that shoulder the burden of this new tax.
The Digital Services Tax will only be paid by companies which
are profitable, and which generate at least £500m a year in global revenues in
the business lines in scope.
The tax will come into effect in April 2020 and is expected to
raise over £400m a year.
Help
for the High Street
There is also support for the High Street retail businesses.
With many small retail businesses struggling to cope with the high fixed costs
of Business rates, in 2016 there was an introduction of business rates relief
measures worth £12bn.
Going further, at the next revaluation in 2021, rateable values
will adjust to reflect changes in rental values. This will help retail
businesses as for the next two years, up to that Revaluation, for all retailers
in England with a rateable value of £51,000 or less, this will cut their
business rates bill by one third.
That’s an annual saving of up to £8,000 for up to 90% of all
independent shops, pubs, restaurants and cafes.
Stamp
Duty and Housing
The Budget is committed to keeping family homes out of Capital
Gains Tax, but some aspects of Private Residence Relief extend it beyond that
objective and is to provide relief for people who are not using the home as
their main residence.
From April 2020 Lettings Relief will be limited to properties
where the owner is in shared occupancy with the tenant and reduce the final
period exemption from 18 months to 9 months.
All first-time buyers purchasing shared equity homes of up to
£500,000 will be eligible for first-time buyers’ relief, an increase since the
last budget abolished Stamp Duty for first-time Buyers on properties up to
£300,000. This relief will be made retrospective so any first-time buyer who
has made such a purchase since the last Budget will benefit.
Personal
Allowance Thresholds
Delivering higher wages for those in work is core to the
chancellor. The poorest 20% have seen their real incomes grow faster than the
richest 20% and the proportion of jobs that are low paid is at its lowest level
for 20 years. This is largely due to the National Living Wage introduced in
2016.
From April the National Living Wage will rise again, by 4.9%,
from £7.83 to £8.21, handing a full-time worker a further £690 annual pay
increase, with the ultimate objective of ending low pay in the UK.
In April 2018, the personal allowance is the current of £11,850 and
£46,350 for the Higher Rate Threshold. However, from April 2019 the Personal
Allowance is raised to £12,500 and the Higher Rate Threshold to £50,000, a year
earlier than planned.
A tax cut for 32 million people and £130 in the pocket of a
typical basic rate taxpayer.
