In a Budget statement he described as a “vision for Britain’s future”, Chancellor Philip Hammond opened his speech by pledging £3bn more for Brexit – so Britain was “prepared for every possible outcome”.
The ‘rabbit out of the hat’ this time was the abolition of stamp duty for all first-time house buyers for properties up to £300k, meaning an effective £5,000 saving. It will also be available on the first £300,000 of the purchase price of properties up to £500,000.
Other highlights include:
- £20 m will be provided to support FE colleges with the introduction of T levels.
- Rises to the National Living Wage from April are confirmed. It will rise 4.4%, from £7.50 an hour to £7.83 – giving full-time workers a further £600 pay increase.
- The personal tax allowance will rise to £11,850, with the higher rate threshold up to £46,350.
- Research and development tax credit will go up to 12%.
- Tax on diesel cars to rise “to improve quality of air in our towns and cities”.
- A national retraining scheme will boost digital skills.
- Electric cars charged at work will not incur benefit in kind taxation. And extra funds and tax incentives were announced for electric car drivers. That includes a new £400m charging infrastructure fund, an extra £100m in Plug-In-Car Grant, and £40m for research into charging.
- In business rates, the switch from the retail prices index (RPI) to the consumer prices index (CPI) is brought forward by two years, to April 2018. The move is worth £2.3bn to businesses over the next five years, the chancellor says. He also announces measures to solve the “‘staircase tax” – extending the £1,000 discount for pubs with a rateable value of less than £100,000 for another year to March 2019. Future revaluations will now take place every three years.
- The National Productivity Investment Fund will be extended for another year and expanded to be worth more than £31bn.
- £2bn more for the Scottish Government; £1.2bn more for the Welsh Government and over £650m more for the Northern Ireland Executive.
- Borrowing is forecast to be £49.9bn this year – £8.4bn lower than forecast at the Spring Budget.
- Borrowing will fall in every year of the forecast – from £39.5bn next year to £25.6bn in 2022-23, to reach its lowest level in 20 years.
- Office of Budget Responsibility revises down estimates – GDP to grow 1.5% in 2017, 1.4% 2018, 1.3% in 2019-20 – so economy slowing for next three years
- The chancellor confirmed tobacco tax will continue to rise at inflation plus 2%. That could see the cost of cigarettes rise by about 6%.
- A new railcard will be available for those aged 26-30, discounting fares by up to a third.
- On tax avoidance/evasion, the chancellor says the government has “raked in an extra £160bn over seven years” as a result of HMRC’s compliance work over the last seven years.
- The VAT registration of £85,000 won’t be reduced.
- Local authorities will be able to change a 100% council tax premium on empty properties.
- The chancellor said HMRC will start to charge more tax on royalties relating to UK sales when those royalties are paid to a low tax jurisdiction, raising about £200m a year.
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