The Budget and it’s key points

Yesterday saw Philip Hammond deliver his third budget as chancellor and focused on areas such as Brexit, the increased expenditure planned in the NHS, updates on the tax system and preparing the country for what he say is a “new chapter” for the economy.

His speech lasted 72 minutes to which he has stated the “era of austerity is finally coming to an end” This was supported by the drastic fall in the country deficit from 9.9% in 2009-2010 to 1.9% currently

Below is a summary of the chancellors key points raised in his budget

The Economy

• 2018 growth forecast downgraded to 1.3% from 1.5% in March, due to impact of bad Spring weather
• But forecast for 2019 raised from 1.3% to 1.6% and annual forecasts raised to 1.4%, 1.4%, 1.5% and 1.6% in 2020, 2021, 2022 and 2023 respectively.
• 3 million more people in work since 2010 and 800,000 more jobs forecast by 2022.
• Wages growth at its highest in nearly a decade

Personal Taxation & Wages

• From April 2019 the National Living Wage will increase by 4.9% from £7.83 to £8.21
• Personal Allowance to increase from £11,850 to £12,500 in April 2019
• Higher rate threshold to increase from £46,350 to £50,000 in April 2019
• There will be an extension to the qualifying period of Entrepreneurs relief from 12 months to 2 years

Welfare & Pensions

• Work allowances for universal credit to be increased by £1.7bn
• 4 million working families with children to benefit by £630 a year
• An extra £1bn to help welfare claimants transfer to the new consolidated benefit
• Chancellor insists controversial system is “here to stay”

Business

• Employment allowance for Employer’s National Insurance is to be revised for larger firms
• VAT threshold to remain unchanged at £85,000 for the next 2 years
• Increases in the annual investment allowance from £200,000 to £1 million for the next 2 years
• Level of contributions made by small companies to the apprenticeship levy to be reduced from 10% to 5%
• Business rates bill for firms with a rateable value of £51,000 or less to be cut by third over two years

Brexit

• The chancellor confirms the government have reached a pivotal moment in Brexit negotiations and are confident of a good deal, however funds have been set aside to cover all eventualities totaling £2.2 billion
• Increase in funding to help departments to prepare for Brexit to over £4 billion
• Spring Statement next March could be upgraded to full Budget if needed

NHS & Health

• Confirmation of an extra £20.5bn for the NHS over the next five years
• A minimum extra £2bn a year for mental health services
• New mental health crisis centres, providing support in every accident and emergency unit in the country
• More mental health ambulances and a 24-hour mental health crisis hotline.
• An extra £700m for councils, for care for the elderly and those with disabilities
• £10m for air ambulances

IR35

IR35 reforms have finally been confirmed to affect the private sector, however the introduction will be delayed until April 2020 and will only affect large and medium sized businesses.