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Budget 2018: Everything you need to know

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  • 29/10/2018
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Budget 2018: Everything you need to know
The Help to Buy scheme and stamp duty relief for first-time buyers is to be extended, as part of a series of measures announced by the chancellor in the 2018 Budget to address the housing crisis.  

 

An additional stamp duty levy of 1% for non-residents was also confirmed in the Budget.

However, first-time buyers of shared ownership properties up to £500,000 are to be sheltered from stamp duty with immediate effect, Philip Hammond announced.

The government backed Help to Buy scheme is to be extended to 2023, it was revealed in the update.

And Hammond added that from April 2020 lettings relief would be limited to owners sharing with tenants.

The chancellor announced £500m for the housing infrastructure fund to unlock a further 650,000 homes, as well as further measures designed to support SME housebuilders.

Alongside the Budget, the Sir Oliver Letwin report on build out rates was published which found that large builders were not engaged in land banking.

However, the chancellor said the government would not respond to the recommendations on reform to the planning process until the New Year.

The expected announcement on capital gains tax relief for landlords selling to long-term tenants failed to materialise.

There will also be a £675m fund to help local councils transform high streets and help facilitate redevelopment from commercial into residential properties.

 

Austerity is coming to an end

The central theme of the chancellor’s Budget was an end to austerity for the British people.

“The era of austerity if finally coming to an end,” Hammond said.

However, he did not echo prime minister Theresa May’s pledge that “austerity is over”.

As part of a series of measures designed to help British people feel better off, the national living wage will rise to £8.21 in April 2019.

And the personal tax allowance will rise to £12,500 in April 2019 with the higher rate threshold lifted to £50,000.

There will also be a further £1bn of measures to aid the transition of Universal Credit over the next five years, with work allowances to be increased by £1,000 a year.

Tax rises

The government is to introduce a ‘tech tax’ to be targeted at established tech giants with profits of £500m per year, which will take effect in 2020 and is expected to raise £400m.

There will also be a new tax on manufacture and importation of plastic packaging that contains less than 30% of recycled plastic.

Further tax evasion measures are expected to raise an extra £2bn.

Economy growth

It was announced that economic growth has been upgraded slightly by the Office for Budget Responsibility from 1.3% to 1.6% in 2019, and to 1.4% in 2020 and 2021, 1.5% in 2022 and 1.6% in 2023.

Inflation was forecast to average 2% next year, with real wage growth predicted over each of the next four years.

And borrowing is expected to gradually fall to £19.8bn by 2023.

Further announcements

The NHS will receive an extra £20.5bn of funding over the next five years.

And there will be a further £1bn to Ministry of Defence for this year and next, as well as £160m of counter-terrorism police funding in 2019-20.

A donation of £10m to support veterans with mental health needs has been pledged, as well as an extra £10m to air ambulance service.

The chancellor also confirmed an extra £400m for schools to buy the extras they need – averaging £10,00 for primary schools and £50,000 for secondary schools.

And £420m has been made immediately available to local highway authorities for potholes and bridge repairs.

Business rates will be revalued in 2021 and over the next two years small businesses in England will see their rates cut by a third.

 

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Philip Hammond Chancellor of Exchequer on Budget Day 2018
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