Five things you must know about Budget 2018

Five things you must know about Budget 2018

Chancellor Philip Hammond pulled a million people out of the higher rate taxpayer bracket in a Budget he claimed was for hard working families of grafters and carers.

In his third Budget - and what should be the last one before Britain leaves the European Union in March next year – he claimed he would open a new chapter in this country’s economic history.

Kicking off his Budget, which came as prime minister Theresa May struggled to finalise a deal with the European Union, Mr Hammond admitted he was holding fiscal headroom in case there was a no-deal Brexit.

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But he said if Mrs May failed to strike a deal with Brexit, despite his claims the country was well funded for leaving the European Union the March fiscal statement could have to be upgraded to a Budget.

After joking he avoided Halloween or a December Budget to miss out on headlines about ‘Hammo House of Horrors’ or ‘Spreadsheet Phil turns Santa Claus’, Mr Hammond scattered cash about in a bid to boost the financial prospects of the country as it heads towards Brexit.

Here are the key details of this year’s Budget that you need to know for your clients:

1) Housing tax boosts

The sale of the family home is usually exempt from Capital Gains Tax.

But the Budget reduced the period that continues to qualify for relief once the owner has moved out from 18 to nine months.

Caroline Le Jeune, partner at tax firm Blick Rothenberg, said: "This has the potential to bring genuine sales of family homes at least partly within the scope of tax."

From April 2020 the government will reform lettings relief so it only applies in circumstances where the owner of the property is in shared occupancy with the tenant.

In a boost for first-time buyers Mr Hammond said he would extend the stamp duty exemption to shared ownership properties worth up to £500,000.

A further £500m was also pledged for the Housing Infrastructure fund, to assist with the building of 650,000 homes.

Mr Hammond also announced plans to reduce planning restrictions that make it hard for shops to be converted into homes.

Plans to rejuvenate the nation's boarded up high streets were also presented as a way to boost the housing stock.

The chancellor promises to help small shops by cutting business rates by a third for all retailers in England with a rateable value of £51,000 or less.

According to Mr Hammond, that will mean an annual saving of "up to £8,000 for up to 90 per cent of all independent shops, pubs, restaurants and cafes".

Mr Hammond announced £675m of co-funding to create a fund to help councils draw up plans for the transformation of high streets and he promised to allow them to invest in the improvements they need to redevelop under-used retail and commercial areas into residential property.

2) Wages and personal tax

From April 2019 the National Living Wage will increase from £7.83 an hour to £8.21.