Hammond heralds vision of an ‘outward looking, free-trading nation’
Chancellor Philip Hammond’s first Autumn Budget was delivered against a backdrop of economic and political uncertainty, fuelled partly by the ongoing Brexit process.
Acknowledging that the UK has entered a ‘critical phase’ of negotiations, the Chancellor set out his vision of a ‘new relationship’ with the European Union – though he was keen to emphasise the need to prepare for ‘every possible Brexit outcome’, announcing that £3bn had been set aside for Brexit preparations.
While asserting that the economy ‘continues to confound those who talk it down’, the Chancellor revealed that the Office for Budget Responsibility has revised down UK economic growth for the next five years, with the economy expected to grow by 1.5% in 2017. Debt is also expected to reach a peak this year, reducing gradually thereafter as a share of GDP, while borrowing forecasts have also been revised downwards.
Technology and housing proved to be a key focus of the speech, with the Chancellor announcing a package of support for electric vehicles, including £400m for new charging points, and a £44bn investment fund to support the government’s target of building an average of 300,000 new homes every year, over the next five years. The government will also make changes to the planning system to ‘encourage better use of land in cities and towns’.
There was also some good news for first-time buyers, as the Chancellor revealed that any seeking to buy a property worth up to £300,000 will be exempt from paying Stamp Duty Land Tax with immediate effect. Meanwhile, the income tax personal allowance will increase to £11,850 from April 2018, with the higher rate threshold rising to £34,500.
Although making a feature of his resistance to reducing the VAT registration threshold, the Chancellor did address the issue of business rates, announcing that firms being affected by the so-called ‘staircase tax’ could apply to have their bills recalculated and backdated, and that future revaluations will take place every three years.
Finally, entering at least partially into the festive spirit, the Chancellor announced that duty on most alcoholic drinks will be frozen, although a new band of duty will be introduced in 2019 for certain higher strength ciders.
- Stamp Duty Land Tax abolished for most first-time buyers
- Personal allowance increasing to £11,850
- Business rates to rise by CPI inflation from April 2018
- VAT registration threshold frozen for two years
- RDEC tax credit increasing to 12% from January 2018
- National Living Wage to rise to £7.83
- Increase in VED for the most polluting diesel cars