Phillip Hammond dusted down the famous old red briefcase and delivered his Budget speech on Monday afternoon.
In it he outlined the government’s spending plans for the rest of this year and into 2019, and as ever there were both supporters and critics of the proposals – such is the way with party politics and an ever-diverse UK media.
In the first instance, it is always better to look at the facts before forming a wider opinion, so here are some key takeaway points from the Budget 2018.
Good News for Workers
Hammond has attempted to re-align the Conservatives as a party for the masses by, in essence, cutting income tax.
The personal allowance threshold, which is the amount you can earn before paying the 20% income tax, has been increased to £12,500 from £11,850 as of April 2019, and so theoretically you should have more money in your pocket.
| Band | Tax Rate | 2018-2019 | 2019-2020 |
|---|---|---|---|
| Personal Allowance | 0% | Up to £11,850 | Up to £12,500 |
| Basic Rate | 20% | £11,851 to £46,350 | £12,501 to £50,000 |
| Higher Rate | 40% | £46,351 to £150,000 | £50,000 to £150,000 |
| Additional Rate | 45% | over £150,000 | over £150,000 |
Of course, the chancellor hasn’t gone all socialist on us, and once again it’s the top earners who really feel the benefit of his generosity.
The income tax threshold at the higher rate has increased at an even greater percentage, up to £50,000 from £46,350 for those on that higher 40% rate.
Booze, Fags & Fuel
Credit: pxhere
It depends on what your favourite tipple is as to whether the Budget 2018 was good for you or not.
If you enjoy a pint of lager or cider, or enjoy a wee drop of the hard stuff, then the good news is that tax on beer and spirits has been frozen; so there won’t be a government-led price increase down your local.
However, there has been an 8p rise in duty on bottles of wine, which will come into power in February 2019. Sorry, vino drinkers!
As for cigarettes, while tobacco duty will only rise in line with inflation, plus an additional 2%, the actual reality of that is the cost of a 20-deck of fags will increase by 33p, with a 17p increase for cigar smokers.
As for petrol and diesel, the price will largely be dictated by market conditions as the government has frozen fuel duty once more.
Healthcare
A whopping £20bn will be pumped into the NHS to improve services at a local and national level.
That includes a much-needed £2bn to improve mental health care provision, with dedicated support centres to be opened up around the country.
An extra £700m will be handed to local councils for their own provisions in aiding the elderly and those with disabilities, and £10m spent on increasing the number of air ambulances available.
Housing & First Time Buyers
Photo © Andy Beecroft (cc-by-sa/2.0)
If you’ve got your eye on a shared equity house on the market the good news: all first-time buyers will be exempt from stamp duty on shared equity properties worth up to £500,000.
There should be plenty more affordable homes built too, with £500m pledged from the Housing Infrastructure Fund and guarantees worth £1bn to smaller house-builders.
Universal Credit, Welfare & Pensions
There has been lots of speculation and criticism of the government’s new Universal Credit scheme, which will see a number of welfare payments condensed into one single sum.
It has confused plenty, and if you are in this boat we advise you head to the Gov.uk website where you can use the calculator to tot up how your payments will be made.
On a side note, the government has pledged an additional £1.7bn to ensure that the roll-out of the scheme is either a) a complete success or at least b) not a complete shambles.
The actual mechanics of benefits payments tend to be littered with smallprint and hoops to jump through, but the general consensus is that working families with children should benefit from the details in Hammond’s little red briefcase.
Big Firms to Finally Pay the Price
For years now, mega-bucks earning firms like Amazon and Facebook have benefitted from, erm, ‘agreeable’ taxation in the UK.
But the Tories appear to be finally clamping down on that jolly boys club by implementing a 2% tax on the profits of big tech companies as of April 2020.
Now, 2% might not sound a lot – and it isn’t to the brands in question, but in reality it will raise tens of millions for the economy each year.
There’s good news for small business too, with a reduction in business rates for firms valued at £51,000 or less; estimated to be around 90% of companies in the UK.
Hammond has also pledged £650m in an attempt to rejuvenate the flagging High Street trade in the United Kingdom.
So Where Does All This Money Come From?
It’s a good question!
While an end to austerity, as Theresa May termed it, is good news for the wider population on both an individual and community basis, the reality is that these spending increases have to be funded somehow.
The short answer is that Hammond, until he and the Prime Minister are probed further by the media and fellow politicians, don’t really have to be too specific about where the extra cash is coming from.
And the more cynical, including shadow chancellor John McDonnell, believe that the Tories have delivered a ‘good news budget’ to appease the public ahead of a potential general election.
“The Tories usually do this,” he said. “If a general election is coming, what they’ll do is they’ll splash out some money and then if they win the election they then start cutting it back again.”
