The Budget statement was delivered today at 12.30pm by the Chancellor of the Exchequer, Philip Hammond.
This is the first of what will now become an annual budget held in the Autumn. From 2018 there will be a ‘Spring Statement’ but all major fiscal announcements will only be made in November.
The Budget is a report presented each year by the Chancellor of the Exchequer to Parliament and the nation. The primary role of the Budget is to control public finances by setting out how much tax the Government will collect, how much the Government will borrow and how much the Government will spend. The Budget Responsibility and National Audit Act 2011 requires the Government to produce a Budget Report (which is the formal name for the Budget) for each financial year. The Charter for Budget Responsibility sets out what the Budget Report must cover.
When the Government publishes the Budget, the Chancellor gives a speech to Parliament in which he sets out the key decisions on tax, borrowing and spending, and his reasons for taking those decisions. This speech is known as the Budget Statement.
The official forecast on which the Chancellor bases the Government’s Budget is provided by the Office for Budget Responsibility (OBR). The Budget Responsibility and National Audit Act 2011 requires the OBR to publish two economic and fiscal forecasts for each financial year, including one published at the Budget. The OBR’s duty is to examine and report on the sustainability of the public finances and it is required to do so objectively, transparently and impartially.
PLEASE NOTE: This snapshot is not intended as an in-depth analysis of the Chancellor’s speech (we will leave that to the industry commentators and experts) but we hope this brief summary helps you gain a quick grasp on the key points delivered by the Chancellor from the dispatch box.
For full details of the following headlines (and more) you may wish to visit the HM Treasury website.
Main Headlines from the Speech
- This budget takes place mindful of the change that will happen as a consequence of Brexit, with the Chancellor determined to ensure the country is prepared for every possible Brexit outcome.
- £3bn set aside for Brexit negotiations
- The Govt to adopt a balanced approach in this budget
- The Chancellor announced adjustments to previous growth forecasts from those previously announced in the 2016 Autumn Statement.
- Growth forecast for 2017 – revised down from 2.0% to 1.5%
- Growth forecast for 2018 – revised down from 1.6% to 1.4%
- OBR borrowing forecast revised down from £58.3bn to £49.9bn for 2017/18
- OBR borrowing forecast revised down from £40.8bn to £39.5bn for 2018/19
Taxation / Welfare / Finance
- Tax system for single use plastic items to be investigated
- National Minimum wage to be increased from £7.50 per hour to £7.83 from April 2018
- VAT registration threshold to remain unchanged at £85,000 for the next two years.
- Business Rates – switch from RPI to CPI now brought forward to 2018
- £1,000 discount to all pubs with a rateable value of less than £100,000 extended to March 2019
- Revaluation to be extended to every three years
- Higher rate of tax threshold to increase to £46,350 from 2018
- Universal Credit – £1.5bn package to address concerns about the delivery of Universal Credit
- Universal credit – 7 day waiting period to be removed / Full months payment can be accessed within 5 days of applying
- Income tax to be applied to royalty sales for digital businesses in the UK if payments are made to a low tax jurisdiction from April 2019
- Ambitious plan to tackle the housing challenge
- £44bn of funding to support the housing market over the next five years
- Pledge to build and extra 300,000 homes per year by the mid 2020s (Biggest rate of house building since 1978)
- Urgent review into the gap between the number of planning permissions submitted and homes built
- New £34m fund to develop construction skills across the country
- With immediate effect, Stamp Duty for first time buyers abolished altogether (for properties up to £300,000) or first £300,000 on properties up to £500,000
- 5 new garden towns to be built
- £28m extra for pilot projects to tackle rough sleeping
- Pledge of a £1.7bn ‘Transforming Cities’ fund
- Further £300m to be invested for HS2
- £2bn more for Scottish Govt, £1.2bn for Wales and £650m for N.Ireland
- New railcard for ages 26-30
- Air passenger duty rates frozen
- £28m funding for support for victims of Grenfell Tower fire
- Councils given power to apply 100% council tax premium on empty properties
Health / Education / Child Welfare
- £40m to be invested to train maths teachers
- £10bn package for frontline NHS services PLUS £2.8bn to be made available for use now and next year for NHS in England (£350m of this for use in Winter 2017/18)
- EIS limits to be doubled for knowledge intensive companies while ensuring that EIS is not used as a shelter for low-risk capital preservation schemes
- £500m investment in initiatives including 5G and full fibre broadband
- £400m investment in electric vehicle infrastructure.
- No benefit in kind applying to charging electric vehicles at work.
- Trained computer teachers to be tripled in number
- No changes to fuel duty
- Tobacco duty calculator will continue at inflation plus 2%
- Alcohol on white ciders to increase. All other alcohol to remain unchanged.
- Car tax on diesel cars only to go up one band, for those vehicles not meeting current emission limits, from April 2018