“A Budget for hard-working families – the strivers, grafters and carers”. This was Chancellor Philip Hammond’s description of his 2018 Budget – the last before Brexit.
Many of the big giveaways had already been leaked in advance – extra funding for the NHS, business rate relief for the High Street and a freeze on fuel duty. However Mr. Hammond still managed to keep a few surprises up his sleeve.
An announcement on the introduction from April 2020 of the proposals to extend off payroll working in the private sector, which are of particular interest to limited company contractors, is covered in detail elsewhere.
PSC contractors who are considering closing their company will, from 6 April 2019, have to have traded for at least 2 years (previously 1 year) in order to qualify for the generous Entrepreneurs’ Relief.
Perhaps the biggest giveaway was the increase, for the next tax year starting 6 April 2019, of the Personal Allowance up to £12,500 and the higher rate tax threshold increase to £50,000. This brings forward the Government’s commitment to deliver these increases by a year and will be welcome by everyone.
Some other tax announcements:
- An increase in exemption from Stamp Duty Land Tax on properties up to £500,000 for first time buyers on shared ownership schemes
- A decision not to change the VAT threshold for 2 years
- An increase in the Annual Investment Allowance from £200,000 to £1m
- A promise to introduce a Digital Services Tax on UK profits for the large digital platforms
- Restricting the tax relief on property formerly used as a principle private residence and subsequently let out
- More measures to tackle tax avoidance and evasion
- Beer, cider and spirit duty frozen
The Chancellor gave details of what he believed was the coming of the end of austerity and his Government’s plans to invest in ‘enterprise Britain’ with a heavy focus on technology support and infrastructure development. Local Authorities are also to be the beneficiaries of £400 million to deal with pothole problems and £650 million to English authorities to help meet the social care shortfall.
With so much depending upon a good Brexit deal Mr. Hammond cautioned that he may have to change his Spring 2019 statement into Budget 2019 (1)!
The full Budget report can be downloaded here.
