The chancellor, Philip Hammond, has unveiled the budget. Amongst the key changes is the news that the National Living Wage is set to rise from £7.50 to £7.83 in April for those ages 25 and over.
We have outlined the other main points from today’s budget below.
Living wage: Up to £7.83 an hour, from £7.50. The 33p an hour rise will be introduced in April and will see a £600 a year pay rise to some full-time workers who do 38 hours per week.
Income tax: Basic rate rises to £11,850 from April; 40% threshold increases to £46,350. Chancellor has previously pledged to increase basic rate to £12,500 by 2020.
Stamp duty: Scrapped for first-time buyers on homes up to £300,000, and on the first £300,000 of properties up to £500,000.
Universal credit: £1.5bn to remove seven-day waiting period; new claimants in receipt of housing benefit will get it for two weeks. According to the Guardian editor, Rowena Mason, this is an expensive move – reducing the waiting time of claimants by one week, make advances quicker and give people housing benefit for longer to avoid the threat of evictions while they wait for universal credit.
Housing: A pledge of £44bn in capital funding to help Hammond’s pledge of 300,000 homes annually by 2020. Hammon is also issuing a threat to developers that their days of landbanking are over, as he hit out at those who do not build on plots that have already been granted planning permission. The chancellor only promises a review but does not rule out direct action.
- 100% council tax premium on empty properties.
- £28m in three new housing pilot schemes – in the West Midlands, Manchester and Liverpool – to halve rough sleeping by 2022 and eliminate it by 2027.
- £44bn of capital funding to help build 300,000 homes annually by mid-2020s.
- New money for homebuilders fund.
- £630m ‘small sites fund’.
- £8bn of financial guarantees to support private housebuilding.
- £2.7bn housing infrastructure fund.
- £1.1bn for new urban regeneration.
- £34m to train construction workers.
Rent: £125m of funding over the next two years to help 140,000 people. This is targeted at those on low incomes and receiving housing benefit in areas where rent is rising the most.
Brexit: £3bn set aside for Brexit preparations. A big boost to the £700m previously allocated.
Duties on spirits, wine and beer are frozen. A new tax band for still cider and perry with alcohol content between 6.9%-7.5% to target white cider.
Economic growth: Lower than expected and productivity is poor. Hammond does not say why the economy will slow for the next three years, but there are inevitable links to Brexit.
- Revised down to 1.5% in 2017 from 2%.
- Forecasts are 1.4% in 2018, 1.3% in 2019, 1.3% in 2020, 1.5% in 2021 and 1.6% in 2022.
- In March the forecasts were 1.6% in 2018, 1.7% in 2019, 1.9% in 2020 and 2% in 2021.
Government borrowing: £49.9bn this year, down by £8.4bn from the previous forecast. Down from £39.5bn next year to £25.6bn in 2022-23.
NHS: An extra £2.8bn given to the NHS, which falls short of the £4bn demanded from the chief executive of NHS England, Simon Stevens.
- £10bn capital investment in frontline services over the course of this parliament.
- £2.8bn of extra funding for England.
Electric cars: £400m for charging infrastructure fund. Those charging electric vehicles at work will not face taxes.
Diesel cars: 1% point increase in company car tax. From 2018, an increase in tax on cars that don’t meet standards – to go up by one band. Proceeds to fund £220m clean air fund.
Education: £40m to train Maths teachers; £600 premium for schools for each student taking A-level maths. Triple the number of Science teachers to 12,000, a new national centre for computing and a national retraining scheme for digital expertise.
Scotland, Wales and Northern Ireland:
- £650m extra for Northern Ireland.
- £2bn extra for Scotland. The government will legislate to allow Scottish police and fire services VAT refunds from April 2018.
- £1.2bn extra for Wales.
New railcard: 4.5 million people aged 26-30 to get a third off rail fares.
Airlines: Increase on air passenger duty on premium-class tickets.
Tax avoidance: Measures to raise £4.8bn by 2022-23.
Business rates: £2.3bn cost to bring forward the change to Consumer Prices Index from Retail Prices Index by two years to 2018. After next revaluation, future revaluations to take place every three years rather than five.
- Staircase tax: businesses hit will have original bill reinstated.
- Discount for pubs (rateable value less than £100,000) extended by one year to March 2019.
VAT: Consultation on threshold of £85,000 at which small businesses pay VAT.
Digital tax: £200m a year extra from income tax on UK sales. Target £1.2bn a year in lost VAT from online shopping.
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