Much Ado About Nothing

Last week, Philip Hammond gave his Budget announcement. A summary is given below and surprisingly, there was no shock pension content on this occasion.

Brexit

  • £3bn set aside for Brexit preparations

Growth

  • Revised down to 1.5% in 2017 from 2%.
  • Forecasts are 1.4% in 2018, 1.3% 2019, 1.3% 2020, 1.5% 2021 and 1.6% 2022.
  • In March, the forecasts were 1.6% in 2018, 1.7% 2019, 1.9% 2020 and 2% 2021

Borrowing

  • £49.9bn this year, down from previous estimate of £58bn.
  • Down from £39.5bn next year to £25.6bn in 2022-23

Research and development

  • £2.3bn of investment.
  • Tax credit 12%.
  • Investigate charges on one use plastic waste.

Technology

  • £20bn of new investment in UK knowledge-intensive industries.
  • £2.5bn from the business bank.
  • Encourage pension fund investment.
  • Boost to EIS.
  • Replace funding from Europe

Electric cars

  • £400m charging infrastructure.
  • Those charging electric vehicles at work will not face taxes

Diesel cars

  • 1 percentage point increase in company car tax.
  • From 2018, an increase in tax on cars that don’t meet standards – to go up by one band

Education

  • Maths: £40m for maths teachers; £600 premium for maths students in A levels.
  • Computing: triple number of science teachers to 12,000; new national centre for computing.
  • National retraining scheme for digital expertise.

Northern powerhouse

  • £1.7bn transforming cities fund

Scotland, Wales and Northern Ireland

  • £650m extra for NI.
  • £2bn extra for Scotland.
  • £1.2bn extra for Wales

Oil

  • Tax changes to encourage investment (North Sea Oil)

Universal credit

  • £1.5bn to remove seven-day waiting period; new claimant in receipt of housing benefit will get it for two weeks.
  • Ongoing ability to apply for advance

Rent

  • £125m of funding to help 140,000 people

Savings Band

  • Frozen at £5,000
  • General ISA limit remains frozen at £20,000
  • Junior ISAs and Trust Funds will be increased in line with CPI to £4,260

Living wage

  • Up to £7.83 from £7.50

Income tax

  • Basic rate rises to £11,850 from April; 40% threshold increases to £46,350.
  • Chancellor has previously pledged to increase basic rate to £12,500 by 2020.
  • Personal Allowance to increase to £11,850 (April 2018)

Pensions

  • Lifetime allowance for pensions – The lifetime allowance for pension savings will increase in line with CPI, rising to £1,030,000 for 2018-19.
  • Basic State Pension will be increased by 3% (£3.65 per week)
  • New State Pension also be increased by triple lock (£4.80 per week)

Marriage Allowance

  • The ability to transfer up to 10% of unused personal allowance to partners will now be allowed where the partner had died before making the claim. Claims can be backdated by 4 years

Capital Gains

  • Freeze allowance

Duties on spirits, wine and beer

  • Frozen with the exception on high strength alcohol (White Cider being used as an example)

Duties on Tobacco

  • Inflation plus 2%

New railcard

  • 4.5 million people aged 26-30 to get a third off rail fares

Airlines

  • Increase on air passenger duty on premium class tickets

Fuel duty rise

  • Cancelled

NHS

  • £10bn capital investment in frontline services over the course of this parliament.
  • £2.8bn of extra funding for England.
  • Pay review will be undertaken in 2018/2019
  • Tax avoidance
  • Measures to save £4.8bn by 2022-23

Business rates

  • £2.3bn cost to bring forward the change to CPI from RPI brought forward to 2018.
  • After next revaluation, future revaluations to take place every three years.
  • Staircase tax: businesses hit will have original bill reinstated.
  • Discount for pubs (rateable value less than £100,000) extended by one year to March 2019

VAT

  • Consultation on threshold of £85,000 at which small businesses pay VAT

Digital tax

  • £200m a year extra from income tax on UK sales

Grenfell Tower

  • £28m for mental health services; local regeneration for Kensington and Chelsea council

Housing

  • 100% council tax premium on empty properties.
  • £28m in three new housing pilots – in the West Midlands, Manchester and Liverpool – to halve rough-sleeping by 2022.
  • £44bn for capital funding to help build 300,000 homes annually by 2020.
  • £8bn of financial guarantees to support private building.
  • £2.7bn housing infrastructure fund.
  • £34m for construction skills.
  • A review to be chaired by Oliver Letwin to look at ways to speed up planning permission.
  • Five new garden towns.
  • One million new homes on the Cambridge Milton Keynes Oxford corridor by 2050

Stamp duty – from immediate effect

  • Abolished for first-time buyers on homes up to £300,000, and on the first £300,000 of properties up to £500,000.

 

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