2018 Budget & the Implications for Business
The business world was on the edge of its seat last week, as Phillip Hammond, Chancellor of the Exchequer, delivered his highly anticipated 2018 Budget.
This was to be his final budget before the much taped about Brexit introduction and the Chancellor declared that this would be the one to ‘end austerity’ and help the much squeezed middle classes and SME owner.
Key Numbers from 2018 Budget
- Reduction in deficit from 9.9% to 1.9% since 2009.
- Unemployment has fallen to its lowest rate in four decades.
- The government is allocating £500 million extra to official departments to help them prepare for Brexit. This is on top of the £1.5 billion already offered.
Budget Highlights for Businesses, Employers and Individuals
- The National Living Wage (NLW) will increase in April 2019 from £7.83 to £8.21 per hour for those over 25 years old.
- A rise has been announced for tax-free personal allowance. In April 2019 the amount will rise to £12,500 which means that a basic rate taxpayer should pay approximately £1,205 less tax next year than they would have in 2010.
- The higher rate tax threshold will rise. In April 2019 the threshold will rise from £46,350 to £50,000.
- Fuel duty will stay frozen in 2019. Duty on cider, beer and spirits will also remain unchanged.
- Small retail businesses will be granted a cut in business rates. The reduction should equate to a third for two years, starting in April 2019. Local high streets will receive £675 million to improve transport links, redevelop empty shops as homes and offices, and restore old properties.
- Introduction of a 2% digital services tax on large digital firms beginning April 2020.
- Changes to the apprenticeship levy scheme as a means of supporting employers. Some employers will now be able to avail of a 50% reduction in pay, compared to what they currently pass on for apprenticeship training.