By Lyndsey Hall
Philip Hammond revealed his first Autumn Budget as Chancellor on November 23rd, announcing the government’s planned spending over the next twelve months. Here are the key points to come out of his speech:
Business and digital
- VAT threshold for small business to remain at £85,000 for two years
- £500m support for 5G mobile networks, full fibre broadband and artificial intelligence
- £540m to support the growth of electric cars, including more charging points
- A further £2.3bn allocated for investment in research and development
- Rises in business rates to be pegged to CPI measure of inflation, not higher RPI, a cut of £2.3bn
Housing
- Stamp duty abolished on properties worth up to £300,000 for first time buyers
- On properties up to £500,000, stamp duty of 5% will be charged on only the remaining £200,000
- Reduction will take immediate effect in England, Wales and Northern Ireland, but not Scotland unless the Scottish government chooses to follow suit
- £44bn in support for housing to meet target of building 300,000 new homes a year by the middle of the next decade
- £400m to regenerate housing estates and £1.1bn to unlock strategic sites for development
- Councils given power to charge 100% council tax premium on empty properties
Alcohol, tobacco and fuel
- Duty on beer, wine, spirits and most ciders will be frozen, equating to 12p off per pint and £1.15 off a bottle of whisky by next April
- Tobacco will continue to rise by 2% above inflation, equivalent to 28p on a pack of 20
- Minimum excise duty on cigarettes introduced in March will also rise
- Duty on hand-rolling tobacco will increase by an additional 1%
- Fuel duty rise for petrol and diesel cars scheduled for April 2018 scrapped
- Vehicle excise duty for new diesel cars not meeting latest standards to rise by one band in April 2018
- Tax hike won’t apply to van owners
- Existing diesel supplement in company car tax to rise by 1%
- Proceeds will fund a new £220m clean air fund
Personal taxation and wages
- Tax-free personal allowance on income tax to rise to £11,850 in April 2018
- Higher rate tax threshold to increase to £46,350
- National Living Wage to rise in April 2018 by 4.4% from £7.50 an hour to £7.83
Welfare and pensions
- £1.5bn package to “address concerns” about delivery of Universal Credit
Economy
- Growth forecast for 2017 downgraded from 2% to 1.5%
- GDP downgraded to 1.4%, 1.3% and 1.5% in subsequent years before rising to 1.6% in 2021-22
- Productivity growth and business investment also revised down
- Another 600,000 people forecast to be in work by 2022
- £3bn to be set aside over next two years to prepare UK for every possible outcome as UK leaves EU
Public finances
- Annual borrowing £49.9bn this year, £8.4bn lower than forecast in March
- Borrowing forecast to fall in every subsequent year from £39.5bn in 2018-19 to £25.6bn in 2022-23
- Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.4% this year, then 1.9%, 1.6%, 1.5% and 1.3% in subsequent years, reaching 1.1% in 2022-23
- Debt will peak at 86.5% of GDP this year, then fall to 86.4% next year, then 86.1%, 83.1% and 79.3% in subsequent years, reaching 79.1% in 2022-23
Education and health
- £2.8bn in extra funding for the NHS in England
- £350m immediately to address pressures this winter, £1.6bn for 2018-19 and the remainder in 2019-20
- £10bn capital investment fund for hospitals up to 2022
- £40m teacher training fund for underperforming schools in England, worth £1,000 per teacher
Other announcements
- £1.7bn city region transport fund, to be shared between six regions with elected mayors and other areas
- £30m to improve mobile and digital connectivity on TransPennine rail route
- £2bn for Scottish government, £1.2bn for Welsh government, and £650m for Northern Ireland executive
- Young person’s railcard extended to 26-30 year olds, giving a third off rail fares
- Further devolution of powers to Greater Manchester
What are your thoughts on the announcement made by the Chancellor today? How will the changes affect you and your business? Join the conversation on Twitter or leave a comment below.
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