16.11.2018 UK Budget 2018 – Updates

16.11.2018 UK Budget 2018 – Updates

On Monday 29 October 2018, Phillip Hammond, the Chancellor has delivered the Autumn Budget 2018.

Brexit

The Chancellor announced that the government is providing £500 million of additional funding for government departments’ Brexit preparations for 2019-20.

This additional funding comes on top of £2.2 billion and £1.5 billion already announced in the spring statement for this year, increasing funding for Brexit preparations to over £4 billion.

Small Businesses

Hammond announced £900m of business rates relief for around half a million small businesses, saving them around a third off their bills, from April 2019.

The Chancellor also promised to reduce the contribution to the apprenticeship levy for smaller businesses from 10% to 5%.

High Streets

Hammond dedicated £675 million tocreate a “future high streets fund” that local councils can access to redevelop their high streets: improve transport links, re-develop empty shops as homes and offices and restore and re-use old and historic properties. 

There will also be a 100% business rates relief for public lavatories.

Digital Services Tax (DST)

Philip Hammond introduced the new digital services tax.

The new measure is intended to be narrowly targeted and, from April 2020, a new 2% tax will be only applying to the digital businesses with global revenues of over £500 million, to reflect the value they derive from the participation of UK users.

The tax will apply to annual UK revenues above £25 million from activities relating to search engines, social media platforms and online marketplaces. Lower rate will apply to businesses with very low profit margins.

The good news is that the government will consult on the detailed design of the digital services tax, which means it will not be introduced until the government legislates in the Finance Act 2020.

Plastics Tax  

Hammond announced that the government will impose a new tax on the manufacture and import of plastic packaging. Plastic tax will apply to the packaging that contains less than 30% of recyclable plastic.

No additional levy will be imposed on disposable plastic cups.

Housing

From 29 October 2018 the government has lifted the restrictions on the amount of money that the local authorities are allowed to borrow in order to build housing. Lifting the borrowing cap will allow local authorities to build more housing.

The Chancellor said that the government would provide a further £500m for its housing infrastructure fund, which will unlock 650,000 homes.

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