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UK BUDGET HIGHLIGHTS
29 October 2018
In announcing that his much-vaunted personal tax boost will come early, Chancellor Phil Hammond stressed he didn’t come into politics to put taxes up.
This means the personal allowance will rise to £12,500 in 2019, with the higher rate threshold rising to £50,000 from April 2019, a year earlier than promised. The current personal allowance stands at £11,850, with the higher rate threshold at £46,350. That’s a tax cut for 32m.
From April the National Living Wage will rise again by 4.9%, from £7.83 a hour to £8.21. This is hand a full-time worker a further £690 annual pay increase.
The new 26-30 railcard, which was announced last year, will also be available across the network by the end of the year. This will save 4.4m young people a third off their fares.
Fuel duties were frozen for the ninth year in a row. Duty on beer, cider and spirits have all been held. However, there will be the usual RPI increases in wine and a new higher rate for ‘white ciders’.
The chancellor extend the cancellation of stamp duty for first time buyers on properties up to £300,000 to first-time buyers of shared ownership properties valued at up to £500,000.
Here's the other big stuff:
Contribution of small companies to apprenticeship levy are to be reduced from 10% to 5%. The government will pay the other 95%! From April large businesses will be able to invest up to 25% of their apprenticeship levy to support apprentices in their supply chain.
A UK Digital Services Tax
The Chancellor said he will ensure it is tech giants and not tech start-ups that shoulder the burden of a new UK Digital Services Tax, which will come into effect in 2020. This is not an online sales tax on good brought online and is only aimed at profitable companies with £500m global revenues. It should raise £400m a year as firms pay 2% tax on revenues they earn which is linked to UK users.
The Chancellor has never signed a private finance initiative (PFI) and says he has now agreed to abolish them for future projects. While honouring existing clients he has setup a Centre of Excellence to manage existing contracts.
Filling in the potholes
Your drive to work should become smoother. As the Chancellor commits £420m immediately to tackle pot holes and bridge repairs.
Tax on plastic
A new tax on the manufacture and import of plastic packaging which contains less than 30% recycled plastic. There are no plans to introduce a levy on disposable plastic cups, but this will be re-examined if no sufficient progress is made.
Increase the Annual Investment Allowance from £200,000 to £1m for two years. Also, from October 2018, businesses will be able to deduct 2% of the cost of any new non-residential structures and buildings off their profits before they pay tax.
Business rate bills
Business rate bills with a rateable value of £51,000 or less to be cut by third over two years.
To increase compliance with existing off-payroll working rules (IR 35) in the private sector, Budget 201 confirms that businesses will become responsible for assessing an individual’s employment status and determining whether the rules apply. The reform will not apply to the smallest 1.5m businesses and will be introduced I April 2020, giving firms longer to adjust!
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