Some of the changes in the 2018 Budget affect all taxpayers and some only impact on those in particular financial positions, or on businesses. In our previous budget article, we’ve laid out the details of changes to National Insurance Contributions, tax brackets and the Personal Allowance. Here, we’ve put together a list of the other key budget elements that we think will make a difference to most taxpayers.
Are you self employed?
The government has decided that a third of people who have a personal service company and define themselves as self employed should actually be classed as employed. The regulation changes that are already in place for the public sector will now be enforced on medium and large companies from April 2020. This will mean more income tax and NICs for the Treasury. But many self employed people feel this is not a fair assessment of their working situation.
Will I still be able to afford a G&T?
Duty on spirits, cider and beer is frozen at its current rate. Some higher strength alcoholic beverages, such as white cider, will increase. Wine continues to increase in line with inflation. Cigarettes will carry on at their current duty of inflation plus two per cent. Rolling tobacco remains liable for inflation plus one percent.
Is there any money to sort out the state of our roads?
The Chancellor announce £420m specifically for repairs to potholes. This will be allocated to local councils to fund the essential road maintenance.
We already know that fuel duty is entering its ninth year at the same rate.
Are you buying your first home?
In 2017 Budget, first time buyers were given a Stamp Duty Land Tax break on properties up to a value of £500,000. This year Chancellor Hammond extends this to first time buyers that are using a shared ownership scheme to buy property up to the same maximum value.
Accidental landlords lettings tax relief
Capital gains tax is likely to be increased for accidental landlords with the removal of lettings tax relief for most people.
The relief can be worth up to £40,000 per person and will mean higher capital gains tax bills for many accidental landlords who have seen the value of their property increase.
Is there any help for those stuck in a spiral of debt?
Debt charities have been campaigning for an extension to the breathing space given to people in debt more time before things end up in court. Instead of the current six weeks, people will now have 60 days to sort out a loan repayment mess before legal action starts. The Budget also included an investigation into the feasibility of a no interest loan scheme for next year.
You can use our money guides and calculators to help you navigate your finances for free.
Interested in a new coin?
The Royal Mint will be producing a newly design 50 pence piece to commemorate Britain’s departure from the EU. It will have the words friendship with all nations on one side and the date 29th March 2019 around the Queen’s head on the other. It is worth noting that the previous Budget announced the removal of one and two pence pieces, alongside the £50 note, but these policies never came to fruition.
Do you claim the Annual Investment Allowance (AIA)?
If you are entitled to the AIA (capital allowances), you know that you can claim annual tax relief on your plant and machinery expenditure up to £200,000. The Chancellor just raised this maximum amount to £1million as part of their attempts to encourage growth in the business sector. This will stay in place for two years.
Is Universal Credit still being rolled out?
Yes, the Universal Credit roll out continues. The scheme amalgamates several state benefits into one monthly payment is incredibly complex and somewhat controversial in practice. Within the Budget, the Chancellor confirmed that the four year freeze on some benefits is still in place and that the Work Allowances will increase once the system is fully up and running.
