Philip Hammond’s budget today can be summarised as:
- More money for the NHS.
- More money for the MOD.
- Money for schools.
- More money to fix potholes.
- More money for housing.
- More money for the Universal Credit scheme.
Yes “austerity” is being relaxed. Changes to taxation are relatively minor, but there will be a new tax on “digital platforms” which is clearly aimed at large companies such as Facebook and Alphabet (Google) who generate large revenues from their operations in the UK but pay very little tax on the resulting profits. There will also be a new tax on plastic packaging (comment: that could have been tougher if the problem of plastic pollution is to be tackled). These new taxes may be at relatively low rates initially but once a new tax regime is in place, the rates tend to go up if history is any guide.
Fuel duty is frozen, beer and cider duty are frozen, spirits duty is frozen but wine duty will rise to match the increase in the cost of living. Tobacco duty will rise also.
There will be a new Railcard for the 26-30 age group to help the millenials.
Personal income tax allowances will rise in April 2019 – £50,000 for higher rate taxpayers. And capital gains tax allowance will rise to £12,000.
All the suggestions about changes to pension tax relief, inheritance tax and AIM tax advantages seem to have been ignored, so there is little to dislike about this budget for stock market investors.
In summary a confident performance from Mr Hammond with an avoidance of unnecessary changes to taxation which helps with longer term planning.
More information available from the Treasury here: https://www.gov.uk/government/news/budget-2018-24-things-you-need-to-know
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )