As the budget is announced here are some of the key points announced by the Chancellor Philip Hammond in his second budget.
Personal taxation and wages
- The tax-free personal allowance on income tax will to rise to £11,850 in April 2018, meaning you will pay no tax on earnings up to this amount.
- For those on a higher salary, the higher-rate tax threshold will increase to £46,350, above which you will pay 40% income tax.
- The National Living Wage which effects those on lower income will rise in April 2018 by 4.4%, from £7.50 an hour to £7.83.
Business and digital
- The VAT threshold for small businesses is to remain at £85,000 for the next two years
- £500m support for development of 5G mobile networks, full fibre broadband and artificial intelligence.
- £540m of support will been given to fund the growth of electric cars, including creating more charging points across the country.
- A further £2.3bn is to be allocated for investment in research and development for science and industry.
- Rises in business rates are to be pegged to the CPI measure of inflation, not the higher RPI, a cut of £2.3bn which will be welcome for many small businesses.
- Digital economy royalties relating to UK sales which are paid to a low-tax jurisdiction are to be subject to income tax as part of tax avoidance clampdown. This measure is expected to raise about £200m a year for HMRC.
- Charges on single-use plastic items to be looked at in an effort to encourage lower usage of plastic ans the waste it generates.
- £30m will be used to develop digital skills distance learning courses.
- Further devolution of powers to Greater Manchester allowing for more local decision making on where money can be spent.
- £1.7bn city region transport fund, to be shared between the six regions with elected mayors which includes Greater Manchester.
- £30m is to used to improve mobile and digital connectivity on the TransPennine rail route a source of major frustration for commuters and travellers in the North West.
If you have any concerns about how the budget measures may effect your business or personal tax returns then please call MCC and we would be happy to arrange an appointment.