This afternoon, the Chancellor delivered his last Budget before Brexit, and still he managed to produce a few surprise measures among the inevitable re-announcements. The most significant measures included:
GDP growth forecast
Public sector net borrowing
2019-20 £31.8 billion
2020-21 £26.7 billion
2021-22 £23.8 billion
2022-23 £20.8 billion
2023-24 £19.8 billion
National debt as share of GDP will fall from 83.7% this year to 74.1% by 2023-24.
Tax and NIC
- Entrepreneurs’ Relief – minimum qualifying period to be extended from one to two years for disposals made on or after 6 April 2019.
- Entrepreneurs’ Relief – definition of “personal company” tightened with immediate effect.
- Annual Investment Allowance to increase from £200,000 to £1 million for two years, from January 2019.
- New Digital Services Tax – from April 2020, profitable companies with over £500 million a year in global revenues will pay 2% tax on their UK revenue.
- Relief for the cost of acquiring IP-rich businesses.
- R&D tax credits – from April 2020, the amount of payable credit that a qualifying loss-making SME can receive through the relief in any one year will be capped at three times the company’s total PAYE and NIC liability for that year.
- Income tax – planned increases of personal allowance to £12,500 and higher-rate threshold to £50,000 will be brought forward from 2020 to April 2019.
- Apprenticeship levy – contribution of small companies to be reduced from 10% to 5%.
- New Structures and Buildings Capital Allowance (SBA) of 2% for new non-residential structures and buildings.
- Reduction in “Special Rate” Capital Allowance from 8% to 6% per annum.
- Restrictions to Capital Gains tax exemption for main residence – from April 2020, lettings relief only available for shared occupation, and “deemed occupation” reduced from 18 months to 9 months.
- Restrictions to use of corporate capital losses in line with income loss restrictions.
- IR35 Reforms for public sector being extended to include medium and large private businesses from April 2020.
- Employment Allowance to be targeted at small and medium businesses with an Employer NICs bill under £100,000 a year from April 2020.
- Insolvency – HMRC to become a preferred creditor.
- Rates for companies with a rateable value of £51,000 or less will be cut by third over two years.
- £900 million in relief for small businesses.
- Schools – £400 million to help schools buy kit. It will be a one-off capital payment worth an average of £10,000 per primary and £50,000 per secondary school.
- £420 million to local highway authorities for road repairs.
- Abolishing PFI and PF2 but will honour commitment to existing contracts.
- Start-up loan funding to be extended to 2021, helping 10,000 entrepreneurs. Contribution of smaller firms to apprenticeship levy to be reduced from 10% to 5%.
- SDLT abolished for all first-time buyers of shared-ownership properties up to £500,000. Will be applied retrospectively date of the last Budget.
- £500 million for the Housing Infrastructure Fund, designed to enable a further 650,000 homes to be built
- £1 billion of British Business Bank guarantees to support smaller housebuilders.