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Autumn Budget 2017 – The Summary

Posted by Charlotte Morley in The Business Hut | 0 comments

Philip Hammond has delivered his second Budget as chancellor. The chancellor has announced plans on tax, housing and travel, alongside an update on the UK’s economic position. We have wrapped up the main summary of today’s budget.


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
  • Short-haul air passenger duty rates and long-haul economy rates to be frozen, paid for by an increase on premium-class tickets and on private jets
  • National Living Wage to rise in April 2018 by 4.4%, from £7.50 an hour to £7.83.

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
  • Digital economy royalties relating to UK sales which are paid to a low-tax jurisdiction to be subject to income tax as part of tax avoidance clampdown. Expected to raise about £200m a year
  • Charges on single-use plastic items to be looked at
  • £30m to develop digital skills distance learning courses

The state of the 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
  • Annual rate of CPI inflation forecast to fall from peak of 3% towards 2% target later this year
  • 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

Welfare and pensions

  • £1.5bn package to “address concerns” about the delivery of universal credit
  • Seven-day initial waiting period for processing of claims to be scrapped
  • Claimants to get 100% advance payments within five days of applying from January
  • Typical first payment will take five weeks rather than current six
  • Repayment period for advances to increase from six to 12 months.
  • New universal credit claimants in receipt of housing benefit to continue to receive it for two weeks

Stamp duty and housing

  • Stamp duty to be abolished immediately for first-time buyers purchasing properties worth up to £300,000
  • To help those in London and other expensive areas, the first £300,000 of the cost of a £500,000 purchase by all first-time buyers will be exempt from stamp duty, with the remaining £200,000 incurring 5%.
  • 95% of all first-time buyers will benefit, with 80% not paying stamp duty
  • Reduction will apply immediately in England, Wales and Northern Ireland although the Welsh government will have to decide whether to continue it when stamp duty is devolved in April 2018
  • It will not apply in Scotland unless Scottish government decides to follow suit
  • £44bn in overall government support for housing to meet target of building 300,000 new homes a year by the middle of the next decade
  • Councils given powers to charge 100% council tax premium on empty properties
  • Compulsory purchase of land banked by developers for financial reasons
  • £400m to regenerate housing estates and £1.1bn to unlock strategic sites for development
  • Review into delays in developments given planning permission being taken forward
  • £28m for Kensington and Chelsea council to provide counselling services and mental health support for victims of the Grenfell fire and for regeneration of surrounding area
  • New homelessness task force

Alcohol, tobacco and fuel

  • Tobacco will continue to rise by 2% above Retail Price Index (RPI) inflation, equivalent to 28p on a pack of 20, while the minimum excise duty on cigarettes introduced in March will also rise
  • Duty on hand-rolling tobacco will increase by additional 1%
  • Duty on beer, wine, spirits and most ciders will be frozen, equating to 12p off a pint of beer and £1.15 off a bottle of whisky by next April
  • But duty on high-strength “white ciders” to be increased in 2019 via new legislation
  • 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 will not apply to van owners
  • Existing diesel supplement in company car tax to rise by 1%
  • Proceeds to fund a new £220m clean air fund

The state of the 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 (England only)

  • £40m teacher training fund for underperforming schools in England. Worth £1,000 per teacher
  • 8,000 new computer science teachers to be recruited at cost of £84m and new National Centre for Computing to be set up
  • Secondary schools and sixth-form colleges to get £600 for each new pupil taking maths or further maths at A-level and core maths at an expected cost of £177m
  • £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
  • No extra funding for nurses pay but a guarantee that if future pay rises are recommended by independent body, there will be new money

Nations/infrastructure/transport/regions/science

  • £320m to be invested in former Redcar steelworks site
  • Further devolution of powers to Greater Manchester
  • £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
  • Scottish police and fire services to get refunds on VAT from April 2018
  • Young person’s railcard extended to 26-30-year-olds, giving a third off rail fares

Find out what the Autumn Budget 2017 means for you… http://www.bbc.co.uk/news/business-42071148

If you need further help or have questions about your business taxes, accounts or bookkeeping, we’d be happy to help. Perhaps we can help organise your accounts with a free month of Xero?

Get in touch to organise a free of charge consultation. Drop us an email hello@thebusinesshut.co.uk or give us a call 01858 289189

Thanks for stopping by,

Charlotte

Source: BBC

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