The Chancellor has laid out details signalling the end to austerity in a statement delivered between key meetings in the Brexit negotiations. Following good news from the OBR, which reported borrowing £13 billion lower than forecast in March, some of the pressure was off for Mr Hammond.
Expectation leading up to the Budget had been for tax rises, with various revenue raising options discussed ahead of the statement. Despite this, the headline changes announced by the Chancellor included some good news for taxpayers and businesses:
- The personal allowance will be raised to £12,500 from April 2019, one year earlier than previously planned. At the same time, the higher rate threshold will rise to £50,000, also a year ahead of schedule.
- The pension lifetime allowance will increase to £1.055 million for 2019/20, with no change to the annual allowances.
- The VAT registration threshold has been frozen for another two years, meaning it will be £85,000 until 2022.
- The annual investment allowance (AIA) will increase to £1 million for all qualifying expenditure on plant and machinery made between 1 January 2019 and 31 December 2020.
- Business rates for retail properties with a rateable value below £51,000 will be cut by a third. Local newspapers will continue to receive a £1,500 discount and public lavatories will receive 100% business rate relief. These reductions will apply until 2021 when the rates will be re-evaluated.
- Fuel duties were frozen for the ninth year in a row, despite some speculation that the Chancellor would scrap the freeze.
- It is worth noting that the draft Scottish Budget will be published on 12 December, which will include details of any changes to income tax rates and thresholds there for 2018/19.
If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the Budget, please call us to discuss them.
You can download the full summary here or download our 2019/2020 Tax Tables here.