Summary of Budget 2018 - Key points you need to know
Phillip Hammond delivered this years budget on the 29 October 2018. Below are the key points of his speech.
Tax-free AllowanceThe personal allowance - the amount you can earn before you start to pay income tax - has been raised from £11,850 to £12,500 as of April 2019. This has been announced a year earlier than planned, and will stay in place in 2020.
Higher Rate ThresholdThe amount you need to earn before you pay tax at 40% has been increased from £46.350 to £50,000 as of April 2019. This now means that as of April 2019, there will be nearly 1 milion fewer higher rate taxpayers than in 2015-16.
National Living WageNational Living wages is increasing from £7.83 to £8.21 an hour (4.9% increase) as of April 2019.
Increase in Universal CreditIncreases to work allowance will mean workin parents and people with disabilities claiming Universal Credit will be £630 better off each year. People will also receive extra help as they move other to the new Universal Credit System.
Employment is at a near record highThe economy has grown every year since 2010, as is projected to continue growing each year of the forecast. The unemployment rate is at its lowest for over 40 years, there are over 3.3 milion more people in work since 2010 and the OBR forecasts 800,000 more jobs by 2022.
Public finances have reached a turning pointSince 2009-2010 the deficit has fallen by four-fiths, from 9.9% to 1.9%. Public dent peaked in 2016-17 and is now falling. On average, spending on public services will grow 1.2% above inflation a year from next year until 2023-24.
New railcard for all young peopleA new railcard is being introduced for all yound people aged 26 to 30, which will be available nationally by the end of the year. This will be the first digital only railcard and will offer up to 1/3 off most rail travel.
Fuel duty will remain frozenIn 2019, fuel duty will remiain frozen for the ninth year in a row, saving the average driver £1,000 since 2010.
Duty on beer, cider and spirits remains frozenThe cost of a pint of beer will be 2p lower than if the duty had risen by inflation.
Short-haul rates of Air Passenger Duty will not riseShort-haul rates of Air Passenger Duty will not rise for the eighth year in a row, keeping costs down for 80% of passengers, Long-haul rates will rise in line with inflation.
NHS funding will increaseThe NHS is the public's number one priority and the government will increase its budget by £20.5 bilion after inflation by 2023-24. Within this, the NHS will increase mental health spending by more than £2 bilion a year by 2023-24.
£650 milion for social care next yearLocal authorities in England will receive a further £650 milion social care funding next year.
£400 milion extra for schools this yearThis will be £10,000 for the average primary school and £50,000 for the average secondary school.
Up to £19 million in commemoration of the Cenenary of the WWI ArmisticeUp to 8 million to help with the cost of repairs and alterations to village halls, miners' welfare facilities and Armed Forces orgainisations' facilities.
£10 million to support veterans with mental health needs through the Armed Forces Covenant Fund Trust
£1 million for First World War Battlefield visits for school students
£30 bilion to improve roadsA £28.8 bilion Nation Roads Fun, paid for by road tax, includes £25.3 bilion for the Strategic Road Network (motorways, trunk and A roads). The largest ever investment of this kind.
It will also help fund the new network of local roads, and larger local road projects.
Local Authorities will received £420 million to fix potholes on roads and renew bridges and tunnels, and there will be a £150 milion to improve local traffic hotspots such as roundabouts.
More money for Scotland, Wales and Northern Ireland
Scotland, Wales and Northern Ireland will all get more money to spend in devolved areas, including education, health and housing. This Budget means:
over £950 million more for the Scottish Government through to 2020-21
over £550 million more for the Welsh Government through to 2020-21
over £320 million more for a Northern Ireland Executive through to 2020-21
There will also be £150 million for a Tay Cities Deal, £120 million for a North Wales Growth Deal, £350 million for a Belfast City Region Deal and opening negotiations on Derry/Londonderry and Strabane City Region Deal.
Over £1.5 billion to support the high street
Small retail businesses will see their business rates bills cut by a third for two years from April 2019, saving them £900 million.
Local high streets will benefit from £675 million to improve transport links, re-develop empty shops as homes and offices and restore and re-use old and historic properties.
Public lavatories will receive 100% business rates relief.
This adds to previous reductions in business rates since Budget 2016 which will save firms over £12 billion over the next five years.
£1 billion more for defence over the next two years
The Ministry of Defence will receive an extra £1 billion to help protect the UK against changing threats such as the rise in cyber-attacks and the resurgence of state-based threats.
This funding adds to the £800 million announced earlier this year.
Increasing funding to help departments to prepare for Brexit to over £4 billion
The government is providing £500 million of additional funding for departments to prepare for Brexit for 2019-20. This is on top of the £1.5 billion already announced for that year.
The Annual Investment Allowance will increase to £1 million from 1 January 2019 to 31 December 2020
The government will increase the Annual Investment Allowance five-fold from £200,000 to £1 million to help businesses to invest and grow.
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.
A 2% digital services tax on large digital firms
From April 2020, large social media platforms, search engines and online marketplaces will pay a 2% tax on the revenues they earn which are linked to UK users.
Further changes to the apprenticeship levy to support employers
From April, large businesses will be able to invest up to 25% of their apprenticeship levy to support apprentices in their supply chain.
Some employers will pay half of what they currently pay for apprenticeship training - from 10% to 5%. The government will pay the remaining 95%.
This information has been gathered from HMRC