In a longer than usual Budget speech, and in a slightly more light-hearted than usual mood, the Chancellor laid out the government’s vision for post-Brexit Britain.
With a raft of measures aimed at supporting businesses, infrastructure and the health service, Mr. Hammond used the better-than-expected public finances to present an upbeat programme. Leaving some of the major announcements until the very end, this was a Budget to mark austerity "finally coming to an end."
Some of the main announcements were:
- Public borrowing in 2018 to be £11.6 billion lower than forecast in March, representing 1.2% of gross domestic product, (GDP) the total value of goods produced and services provided.
Income tax, wages & pensions
- The personal allowance will be raised to £12,500 from April 2019, one year earlier than planned. The higher rate threshold will also rise to £50,000 from April 2019, also a year earlier than planned, and these rates will rise in line with inflation.
- The lifetime allowance for pension savings will increase to £1,055,000 for 2019/20 in line with CPI.
- The national living wage will increase from £7.83 an hour to £8.21.
Business & capital gains tax
- For entrepreneurs’ relief, the minimum period throughout which the qualifying conditions for relief must be met will be extended from 12 months to 24 months from 6 April 2019.
- From 1 April 2020, companies will be subject to a 50% limit on the proportion of annual capital gains that can be relieved by brought-forward capital losses. Companies will have unrestricted use of up to £5 million capital or income losses each year.
- Business rates bills will be cut by one-third for retail properties with a rateable value below £51,000 for two years from April 2019.
- Capital gains tax lettings relief will only apply where the owner of the property is in shared occupancy with the tenant. The final period exemption will also be generally reduced from 18 months to nine months.
- The VAT registration threshold to be maintained at the current level of £85,000 until April 2022.
- Large social media platforms, search engines and online marketplaces will be pay a 2% tax on the revenues they earn which are linked to UK users from April 2020.
- All first-time buyers purchasing shared equity homes of up to £500,000 to be exempt from stamp duty.
- Extra £500 million for preparations for leaving the EU.
- Spring Statement next March could be upgraded to full Budget if needed.
- A commemorative 50 pence coin to mark the UK's departure from the EU.
- Confirmation of an extra £20.5 billion for the NHS over the next five years, with a minimum extra £2 billion a year for mental health services.
Defence & security
- An extra £160 million for counter-terrorism police.
- An extra £1 billion for armed forces, for cyber-capabilities and the UK's new nuclear submarine programme.