A Social Budget?
As the Chancellor Mr Hammond took to the dispatch box to present his budget today, he perhaps attracted more interest than any Chancellor for many years.
This budget was seen as one of the key indicators of the minority Governments direction of travel. Would we see a typical Conservative approach with tax breaks to entrepreneurs and more trimming to the public sector – or would we see a more Socialist budget with more public sector investment and raised borrowing?
After some jokes about cough sweets, the Chancellor got down to business. His open report about downgraded GDP growth forecasts for the UK will cause some concern. However, he delivered a steady budget with some encouragement for the younger generation.
The Government had always committed to raise the personal allowance (that’s the bit you can receive before paying tax) to £12,500 by the end of parliament. Today the Chancellor announced a rise to £11,850 for the 18/19 tax year and a rise to the higher rate threshold of £46,350. This should really help lower and middle earners.
Stamp Duty and Empty Properties
The battle lines are now clearly drawn, following on from George Osbourne’s attack on ‘buy to let’ landlords. If you own an empty property expect double the council tax, however, if you are a first time buyer you can expect no stamp duty up to £300,000.
This is a clear message from the government to invest in something other than residential property if you already own a home. The fight continues to try and bring down the price of housing for young people struggling to get any kind of foothold on the property ladder.
Pension Lifetime Allowance
Many pension advisers will have breathed a sigh of relief that very little changes were made to pensions this year. Previous budgets have seen pensions constantly hit with changes. The only reported alteration was a modest increase in the Lifetime Allowance to the figure of £1,030,000.
The 18/19 tax year allowance remains unchanged at £20,000, whilst the 18/19 Junior ISA allowance rises to £4,260.
There were also no announcements for changes to Capital Gains Tax or Inheritance Tax. Corporation tax appears to remain unchanged and Universal Credit got a shot in the arm.
This budget was reassuringly boring. No grandstanding or historical blaming. It was, perhaps, the most frank and honest budget we have seen for some time. Mr Hammond is never going to win any prizes for his delivery skills, but the substance and reasoning behind this budget came through today. This was more of a social budget that left Mr Corbyn little ammunition – other than to (understandably) attack the dismal forecasts for the UK’s GDP growth.
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