Edinburgh Chamber of Commerce – Budget Summary 2018
Yesterday, Chancellor Phillip Hammond delivered his Autumn Budget, five months before Britain is due to exit the European Union.
We have highlighted some key points below, to help you understand what the Budget means for businesses across the country.
Key points and headlines:
- UK growth forecast updated from 1.3% to 1.6% for 2019
- Public borrowing in 2018/19 is set to be £11.6bn lower than forecasted at the Spring Statement
- Tax cuts: personal allowance will rise to £12,500 and the higher rate threshold to £50,000
- Universal Credit is here to stay: £1bn pledged over 5 years to aid the transition
- Private Finance Initiatives (PFIs) abolished
Local Growth/Devolution: Scotland:
- An extra £950 million for the Scottish Government, meaning its budget will have grown in real terms to £32 billion by 2020.
- £150 million for a Tay Cities Deal to support growth and create new jobs
- A UK-wide £10 million Fisheries Technology Fund to help transform the industry and make fishermen in Scotland world leaders in safe, sustainable and productive fishing.
- A boost to the Scotch Whisky industry, which already accounts for 20% of UK food and drink exports, as Spirits Duty is frozen for the second Budget in a row. This means the price of a typical bottle is 30p lower than if it had risen by inflation.
- Continuing support for the oil and gas sector, through maintaining our globally competitive position and further strengthening Scotland’s role as a world leader in this area.
- Appointing a dedicated manager from the British Business Bank in Scotland, for the first time, to help to reduce geographical imbalances in small businesses’ access to finance.
- An additional £500m of funding for Brexit preparations announced. This is on top of the £1.5billion set aside in the 2017 Budget.
Labour Market and Skills:
- The hourly National Living Wage will increase 4.9% from £7.83 to £8.21
- Up to £5 million is going to the Institute for Apprenticeships and National Apprenticeship Service in 2019-20, to “identify gaps in the training provider market and increase the number of employer-designed apprenticeship standards available to employers”
Business Rates & Taxation
- From April 2020, the government will introduce a new Digital Services Tax of 2% on the revenues of firms generating global revenues from in-scope business activities in excess of £500m per annum
- The VAT threshold will be maintained at the current level of £85,000 until April 2022
- Business rates in England will be cut by one-third for high street retail properties with a rateable value below £51,000 for 2 years from April 2019
- From April 2020, the government will restrict access to the Employment Allowance* (EA) to employers with National Insurance contributions of below £100,000 in the previous tax year. Over 99% of micro-businesses and 93% of small businesses will still be eligible for the EA. *The EA provides businesses and charities with up to £3,000 off their employer NICs bill.
International Trade and Investment
- Commitment from HMRC to halve the time it takes to approve customs trusted traders within two years (including ‘Authorised Economic Operators’ or AEOs)
- Department for International Trade (DIT) will expand its network of advisers in Europe
- From summer 2019 citizens of the United States, Canada, New Zealand, Australia and Japan will be able to use the e-passport gates at UK ports