In the 2018 UK Budget, the Chancellor of the Exchequer, Philip Hammond, was able to make some eye-catching announcements including:
- The increase in the tax-free Personal Allowance to £12,500 from April 2019, a year ahead of the manifesto commitment;
- The increase in the Higher Rate Threshold to £50,000 from April 2019, again, a year ahead of the manifesto commitment, resulting in nearly £1m fewer higher rate tax payers than four years ago;
- The National Living Wage will increase to £8.21 from April 2019;
- The Annual Investment Allowance to increase from £200,000 to £1,000,000 between 1st January 2019 and 31st December 2020;
- Over £1.5 billion to support the High Street, the flagship measure being a reduction of one-third of Business Rates on properties with a rateable value of less than £51,000 for two years from April 2019;
- A guarantee that the current VAT threshold of £85,000 would be maintained until April 2022;
- An additional £1.7 billion to increase existing work allowances in Universal Credit tax system;
- Fuel duty to remain frozen for a ninth year with beer, cider and spirits duty also frozen;
- Increased funding for mental health, social care and roads; and
- Additional funds for the nations and the regions.
However, as ever, there some announcements which will adversely impact a wide cross-section of tax payers – changes to the off-payroll working in the private sector, Entrepreneurs’ Relief, R&D tax relief for small and medium-sized enterprises and to Letting Relief and the final period exemption in calculating the Capital Gains Tax private residence relief.
Our newsletter in the morning will explore these changes in more detail.
In the meantime, if you have any questions on the 2018 UK Budget, please contact us at email@example.com.