UK Budget changes in brief
For those whose tax affairs remain in the UK, here are the headline changes in yesterday's gloomy, 'balanced' budget from Chancellor Philip Hammond as the UK slips out of the world's top five economies for the first time.
The shadow chancellor, John McDonnell, condemned Hammond’s statement as “a nothing-has-changed budget from an out-of-touch government with no idea of the reality of people’s lives and no plan to improve them.”
Stamp duty will be abolished for first-time buyers on properties worth up to £300,000, or the first £300,000 of a property worth £500,000. This will save £1,660? on the average first-time buyer property.
The Chancellor said 95% of first-time buyers who pay stamp duty will benefit while 80% of people buying their first home will pay no stamp duty. There will be no relief for those buying properties worth more than £500,000.
The change is to be “permanent”, rather than the “holiday” some predicted before the Budget.
Motorists who buy diesel cars
From April 2018 vehicle excise duty on new diesel cars will go up by one “band” of duty, although vans will not be affected. The change will also not apply to next-generation clean diesels – those that meet “Real Driving Emissions Step 2” standards.
Vehicle excise duty rates for cars, vans and motorcycles registered before April 2017 (and the first-year rates for cars registered after April 2017) will increase in line with RPI inflation on April 1, 2018.
Charging electric vehicles at work will not count as a “benefit in kind” for tax purposes. The Government will cancel the fuel duty rise for petrol and diesel cars scheduled for April.
The personal allowance, the first slice of your income on which no tax is due, will rise from £11,500 to £11,850 in April 2018. The threshold at which the higher rate of tax of 40pc applies will rise from £45,000 to £46,350 at the same time. As a result the average taxpayer will pay at least £1,075 less tax than in 2010-11, Mr Hammond said.
Duties on spirits, wine and beer will be frozen, but the tax on “low-cost, low-quality” products such as “white cider” will increase in 2019. Mr Hammond said the freezing of duty on beer, whisky and wine would mean a pint of beer would cost 12p less on average and a bottle of whisky £1 less.
Duty rates on all tobacco products will increase by 2 percentage points above RPI inflation until the end of this parliament. Taxes on hand-rolling tobacco will increase by an additional 1 percentage point. These changes will come into effect on 6pm on Budget day.
The Chancellor is to double the amount that you can put into the Enterprise Investment Scheme (EIS) for “knowledge” businesses, from £1m to £2m. However, he said the enhanced perk would not enable the scheme to be used as a tax shelter for low-risk assets. The capital gains tax annual exemption will rise in line with the consumer prices index from £11,300 to £11,700.
No increases in air passenger duty for economy class, paid for by an increase for premium classes and private jets.
The Government will launch a consultation on barriers to longer tenancies in the private rented sector, such as mortgage lenders’ refusal to allow them.
Owners of second properties
The Government will give local authorities the power to charge a 100% council tax premium on empty properties.