Hammond Giveth, and he taketh away
There’s been a lot of fuss in the media lately about the latest budget, with technical jargon being thrown about in what I’m assuming is a competition so see who can overcomplicate everything the most. With that being said, here are some of the main things you need to know about.
One of the biggest announcements in the budget is the changes to the personal tax thresholds – with the personal allowance being raised to £12,500 a year. That’s an extra 650 tax free pounds in your pocket! The higher rate threshold will also be increased from £46,350 to £50,000, meaning more of your income will be taxed at a lower rate.
Once again, landlords are hit harder by the changes. From April 2020 lettings relief is set to be limited to properties where the landlord is still living there. The loss of this relief – worth up to £40,000 per person – means that upon the sale of any rental property that you used to live in, your capital gains tax bill is set to be a lot higher. Though the government will be consulting on these changes, for now we can only assume a worst-case scenario.
The national living wage for those of us over 25 will increase by 38 pence per hour from April 2019, up from £7.83 to £8.21. Not a vast increase I’m sure we can all agree, but more money is never a bad thing and with beer duty being frozen – I’m sure the extra income will be spent incredibly wisely.
Of course there are many other implications as a result of the latest budget, from Brexit preparations to greater spending on national security. But from an individual perspective, we will all have a bit more income making it home with us.
If you would like more information on how the 2018 budget will affect you, or your tax return, please get in contact with a member of our tax team.
Luke is a tax trainee at Grafton Jones, who joined us in April 2018 and is currently working towards the ATT qualification.