Budget 2018: what’s in store for 2019/20?
27th November 2018
Chancellor Philip Hammond revealed plenty of breaks for taxpayers and businesses alike when delivering his Budget 2018 speech last month.
However, the elephant in the room surrounds the Brexit withdrawal agreement, with Hammond’s Budget expected to be abandoned in the event of a no-deal.
Assuming Brussels and Westminster reach an accord in the near future, what’s in the store for your finances in 2019/20?
Income tax thresholds to increase
The personal allowance is to increase from £11,850 to £12,500 from 6 April 2019, at which point the higher-rate threshold will rise to £50,000.
What that means is that basic-rate taxpayers ought to be £130 better off next year, while higher-rate taxpayers should have another £860 in their pockets.
However, this income tax cut for millions of taxpayers was offset by changes to national insurance contributions.
From April 2019, workers in England will now pay only 20% tax on the slice of their income between £46,350 and £50,000, rather than 40% in 2018/19.
However, as the band for National Insurance contributions also goes from £46,350 to £50,000 this additional amount is charged to National Insurance at 12% instead of 2%.
Stamp duty break extends to shared-ownership homes
First-time buyers who wish to get on the property ladder by purchasing a shared-ownership property can do so without paying stamp duty on the first £300,000 of homes that cost up to £500,000.
This change takes effect immediately and can even be backdated to 22 November 2017, so those who bought a shared-ownership home after this date may be eligible to claim a stamp duty refund.
Small retailers in business rates boost
If your business has a rateable value of less than £51,000, its business rates bill will reduce by a third from 6 April 2019.
This will be in place for the next two years – until April 2022 – and stands to benefit around half a million independent shops, cafes and pubs.
As a result, Hammond claims that 90% of small retailers will save around £8,000 a year.
Annual investment allowance rises five-fold
Businesses using certain capital allowances will also receive a boost when the annual investment allowance increases from £200,000 to £1 million from 1 January 2019.
Therefore, it’s possible for a business to deduct the full value of qualifying plant and machinery from its profits before tax.
At the time of writing, this measure will only be available for two years, although future tweaks to the investment allowance are likely.
For more information on what you can expect in 2019/20, email us at firstname.lastname@example.org or call 0117 305 2600.