A few points from the ‘Budget 2018’
Personal Allowances and the Basic Rate Band
The Chancellor brought forward an election pledge to increase both the Personal Allowance and Higher Rate tax band, affecting 32 million people. From April 2019, the Personal allowance will increase to £12,500, while the higher rate tax threshold will be £50,000, rising from £11,850 and £46,351 respectively. The National Living Wage will also increase to £8.21 from April 2019 from the current £7.83, representing a 4.9%, and significantly above inflation, increase. This will affect all earners in the UK.
Main residences will remain exempt from Capital Gains Tax (CGT), ensuring families that sell their home do not face a tax from the sale of their property. Furthermore, all shared equity purchases of up to £500,000 will be exempt from Stamp Duty.
Small businesses and self-employed
The threshold for VAT registration will surprisingly remain unchanged for the next two years despite speculation that it may drop. The fact the current £85,000 turnover threshold remains in place will be a great relief to many people who are self-employed or run small businesses since they can remain free from VAT registration as long as they remain under the threshold.
Businesses occupying property with a rateable value of less than £51,000 will have their business rate cut by a third over the next two years. The amount businesses pay in rates has been a longstanding issue for many, particularly those in retail as the high street attempts to compete with online businesses. The changes will mean savings for 90% of shops, restaurants and cafes.
Last but not least, a £695 million initiative that will help small businesses to hire apprentices was also announced. Those firms taking on apprentices will have the amount they need to pay halved which is good news.