How you’ll get to keep more of your wages before tax is taken away, and other announcements.
This year’s big financial statement from the Treasury was long. And boring. Oh so boring. I’ve reported on every Budget, Spring Statement and Autumn Statement since 2014 for the Money Advice Service and this has to be one of the dullest.
But that doesn’t mean some of the announcements won’t affect your bank balance, with top earners looking to keep £860 extra each year.
I’ve rounded up the changes which I think it’s worth you knowing about – though bear in mind it could all change if there’s a no-deal Brexit.
Income Tax changes
In recent years the Income Tax thresholds have risen in April, mainly to meet a Tory manifesto pledge to hit certain levels by April 2020. Well the Chancellor said he’s bringing that total forward by a year.
This means from next April you’ll pay less tax on your salary and income. You’ll be able to earn £12,500 each year tax-free (currently £11,850), which is worth £130 to anyone earning over that amount.
The next bracket will go up from £46,351 to £50,000. This means you’ll pay 20% tax rather than 40% tax on any earnings in that range. If you earn £50k or more then it’s £730 on top of the £130, so it definitely benefits higher earners.
Though anyone earning over £125,000 will see the tax relief on that first £12,500 gradually reduce to zero.
Pay increase for low income earners
The National Living Wage will go up in April from £7.83 an hour to £8.21 an hour. There will also be increases for all groups under 24 years old on the Living or Minimum Wage.
Longer breathing spaces for debt
There could be an a new 60-day period for people to get on top of debts before creditors can take action. When this was announced last year only six-weeks was proposed. There will also be a pilot of interest free loans, based an a scheme run in Australia.
High street help
If like me you’ve seen more and more shops and restaurants close in your local town centre then another announcement might help.
Business rates for many businesses will be cut by a third. It’s estimated that 90% of shops, cafes and restaurants will benefit. Fingers crossed it makes a difference.
Another move that could help is a new tax on the really big digital businesses like Amazon and Google.
Universal Credit isn’t going away
Despite some fierce lobbying in the last few weeks, Universal Credit will continue. This benefit system reform has been criticised for long waiting times that push struggling people into food poverty and homelessness.
However the Government announced a few changes. First the work allowance – how much people can earn and keep their benefits – will go up to £1,000.
There will also be an additional £1bn put into funding the transition from the old systems such as Job Seekers Allowance and Housing Benefit to UC so people moving across don’t lose out.
Shared ownership stamp duty refunds
If you were first-time buyer of a shared ownership property since the last budget (22nd November 2017), you’ll be able to claim all or part of your stamp duty back – as long as your home cost less than £500,000.
And the same rules will apply for all first-time buyers from now on.
Potholes to be filled
The Beatles sang, there were “Four thousand potholes in Blackburn, Lancashire”. And that was in 1967. Who knows how many there are today, but it’s a lot. And not just in Blackburn.
So there’s a new fund of £420 million available immediately for local authorities in England to start fixing them.
Good news for beer and spirit drinkers (and drivers), bad news for wine drinker and smokers
Tax is frozen on beer, spirits, petrol and air passenger duty on short haul flights. But it goes up on wine, tobacco and long haul flights.
2 thoughts on “Budget 2018: What it means for you”
Thanks so much for breaking down all the high flown language so that the masses can get a gist of what that ‘talk’ was about. I will be able to pass this link on to others.