Autumn Budget 2018
A budget for “Strivers, grafters and carers”
With Brexit negotiations entering their final stages, it was uncertain whether the chancellor would use the Budget to make significant announcements. He was under pressure to instil confidence in the UK economy and support the Prime Minister in the final stages of Brexit negotiations and he did not disappoint. The chancellor made some announcements that will keep some of the big political issues at bay for the next 12 months without making long term commitments. This included addressing concern around Universal Credit and providing more funding for adult social care.
The chancellor announced a number of tax changes and consultations. For individuals, the increases in personal allowances and the higher rate threshold will take effect one year earlier than planned. For businesses, the tax savings are focused towards innovation and investment.
However, the Chancellor concluded that although austerity is coming to an end, financial discipline will remain.
Here are the key highlights from the budget:
- Personal allowance and basic rate band increases brought forward from April 2020 to April 2019
- Annual Investment Allowance increased to £1m from January 2019 for 2 years
- Entrepreneurs relief qualifying criteria changed immediately with an extension of the qualifying period to 24 months for disposals after April 2019
- Businesses owning retail properties with a rateable value below £51,000 will have rates bill cut by a third for 2 years from April 2019
- New non-residential structures and buildings will be eligible for a 2% capital allowance
- Capital allowance special rate reduced from 8% to 6% from April 2019
- IR35 rules extended to the Private Sector for large and medium sized businesses from April 2020.
- Digital services tax introduced for large technology businesses, resulting in a proposed 2% tax on revenues effective from April 2020
- Repayable R&D tax credits restriction proposed – limited to three times PAYE and NICs from April 2020