Budget 2018 Summary
On Monday 29 October 2018 the chancellor outlined the governments plans for the financial year starting April 2019. This summary is an extract of the full budget, only high lighting what we believe will useful for individuals, self employed and small business owners.
The chancellor (Phil Hammond) announced that he was bring the increase of the personal allowance to £12,500 forward by a year to April 2019, with the higher rate threshold rising to £50,000.
Fuel duties will be frozen for another year. This is the ninth year in a row, and will come as a relief to all people that have to travel a lot, as the cost of diesel and petrol continue to rise.
National Living and Minimum Wage Rates
The National Living wage and National Minimum wages will increase from April 2019.
National Living Wage: for 25 year olds and over;
- This will rise fro £7.83 to £8.21, an increase of 38p or 4.9%
National Minimum Wage:
- 21 to 24: will rise from £7.38 to £7.70, an increase of 32p or 4.3%
- 18 to 20: will rise from £5.90 to £6.15, an increase of 25p or 4.2%
- Under 18: will rise from £4.20 to £4.35, an increase of 15p or 3.6%
- Apprentice: will rise from £3.70 to £3.90, an increase of 20p or 5.4%
Minimum pension contributions where not mentioned in this budget, though they are due to raise again in April 2019 according to the previous announcements. So from April 2019 the minimum contributions will be 8%. 3% from the employer and 5% from the employee.
The contribution of small companies toward the cost of training an apprentice are t be reduced from 10% to 5% of the training bill. With the government paying the remaining 95%.
Tax on Plastic
It has been announced that a new tax on the manufacturing and importing of plastic packaging materials which contain less than 30% recycled plastic. The exact level of this tax is still in consolation and isn't due to come into force until April 2020.
Annual Investment Allowance
The Annual Investment Allowance (AIA) will be increased from the current £200,000 to £1m for two years. Also, as of October 2018, businesses will be able to deduct 2% of the cost of any new non-residential structure and building off their profits before they pay tax.
Any business paying business rates, and have a rate-able value of £51,000 or less will have their rates cut by a third over two years.
It has been announced that to increase compliance with existing off-payroll working rules (IR35) in private sector, that it will become the businesses responsibility to assess and individual's employment status and determine whether the rules apply or not. This will apply to the smallest 1.5m business and will be introduced in April 2020 to give firms longer to adjust.