Chancellor Philip Hammond today delivered his last Budget before the UK leaves the EU. It took place a month earlier than usual due to Brexit negotiations.
Mr Hammond described it as a Budget for hard working families and one that paves the way for a brighter future. “The era of austerity is finally coming to an end,” he claimed.
Notable announcements included bringing forward the increase in personal tax allowance by a year to 2019, tax breaks for businesses, significant funding to help improve Britain’s roads, no Stamp Duty for first-time buyers of shared ownership homes, and a continued freeze on fuel duty.
Here’s a round-up of the main highlights…
"A tax cut for 32 million people: £130 in the pocket of a typical basic rate taxpayer. Austerity is coming to an end, but discipline will remain."
The personal allowance for basic rate (20%) taxpayers will rise from £11,850 to £12,500 in April 2019, saving the average consumer £130.
At the same time, the threshold for the higher rate of tax (40%) will increase from £46,351 to £50,000. The Chancellor described the move as "a tax cut for 32m people.”
Mr Hammond announced local highway authorities will receive £420 million to help tackle potholes and other minor work on Britain’s roads, part of a 30% jump in infrastructure spending.
As expected, the duty on petrol and diesel has also been frozen for the ninth consecutive year, bringing the total saving for the average driver to over £1,000.
The government will introduce a new railcard by the end of 2018. It will offer discounts of a third on rail fees to over four million 26-30 year olds in England, Scotland and Wales, creating an average saving of £125.
The Chancellor also earmarked £90 million for smart transport, including on-demand buses. Air Passenger Duty, a tax consumers pay on flights, will be pegged to inflation from April 2020. Short-haul flights won’t be affected.
Stamp Duty and housing
There’s good news for first-time buyers in England. Stamp Duty relief, which was raised by £300,000 last year, will be extended, and abolished for buyers in shared ownership on properties up to £500,000.
This will be retrospective, so first-time buyers who have bought since last year’s Budget will be able to benefit. Any first-time buyers purchasing properties worth more than £500,000, however, will not receive any Stamp Duty relief.
The Chancellor also announced a further £500 million to help build 650,000 new homes.
As part of the government’s wider pledge to inject £20bn into the NHS, mental health services will receive a cash boost of £2 billion a year. As part of a new crisis service, mental health ambulances will be on call, while comprehensive mental health support will also be available in every major A&E department. In addition, there will be a 24-hour mental health crisis hotline.
Dedicated crisis teams will also be available to help children and young people with mental health issues.
Minimum living wage and Universal Credit
From April 2019, the national living wage for the over 25s will increase by 4.9%, from £7.83 to £8.21.
Mr Hammond said he would also introduce a £1bn package of measures over five years to support the government’s much maligned Universal Credit scheme.
He said he would increase the allowance for 2.4m families receiving universal credit by £1,000 a year at a cost of £1.7bn.
Alcohol and tobacco
Duty on beer and cider and spirits will be frozen, which means a saving of 2p on a pint, a penny on cider and 30p on bottles of gin and scotch.
But wine duty will increase in line with the retail price index (RPI) measure of inflation, which is currently 3.4%.
Tobacco duty will rise in line with inflation, plus 2%.
The High Street
Acknowledging the plight of the UK’s struggling retailers, the Chancellor announced a £675 million ‘Future of High Streets Fund’ to help support the transformation of the UK’s high streets, improve transport links and turn empty shops into homes and offices.