Budget 2018 – Key Points

Personal taxation and wages

The personal allowance threshold, the rate at which people start paying income tax at 20%, to rise from £11,850 to £12,500 in April – a year earlier than planned
The higher rate income tax threshold, the point at which people start paying tax at 40%, to rise from £46,350 to £50,000 in April
After that, the two rates will rise in line with inflation
National Living Wage increasing by 4.9%, from £7.83 to £8.21 an hour, from April 2019.

Business and digital

New 2% digital services tax on UK revenues of big technology companies, from April 2020
Profitable companies with global sales of more than £500m will be liable
Private finance initiative (PFI) contracts to be abolished in future
New centre of excellence to manage existing deals “in the taxpayer’s interest”
Annual investment allowance to be increased from £200,000 to £1m for two years
Contribution of small companies to 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
Measure to benefit 90% of independent shops, pubs and restaurants, cutting bills by £8,000
£900m in business rates relief for small businesses and £650m to rejuvenate High Streets
New 100% mandatory business rates relief for all lavatories made available for public use
Extending changes to the way self-employment status is taxed, from the public sector to medium and large private companies, from 2020

Welfare and 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”

Stamp duty and housing

All first-time buyers purchasing shared equity homes of up to £500,000 to be exempt from stamp duty
£500m for the Housing Infrastructure Fund, designed to enable a further 650,000 homes to be built
Lettings relief limited to properties where the owner is in shared occupancy with the tenant
New partnerships with housing associations in England to deliver 13,000 homes
Guarantees of up to £1bn for smaller house-builders

The economy

Era of austerity is “finally coming to an end”, the chancellor says
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

Public finances

Public borrowing in 2018 to be £11.6bn lower than forecast in March, representing 1.2% of gross domestic product, (GDP) the total value of goods produced and services provided
Borrowing as a share of GDP to rise to 1.4% next year
Borrowing to total £31.8bn, £26.7bn. £23.8bn, £20.8bn and £19.8bn in next five years
Debt as share of GDP peaked at 85.2% in 2016-17, falling to 83.7% this year and to 74.1% by 2023-24
2% annual average growth in departmental spending promised

Brexit

Transport, infrastructure and culture

A £30bn package for England’s roads, including repairs to motorways and potholes
A 30% growth in infrastructure spending
Opening the use of e-passport gates at airports – currently available to people from Europe – to those from the USA, Canada, New Zealand, Australia and Japan
Air Passenger Duty to be indexed in line with inflation