The Chancellor of the Exchequer, Philip Hammond, focused on Britain’s long-term economic future by announcing investment in boosting productivity, new technologies (artificial intelligence and driverless cars) and research and development, whilst revising down the short-term expectations for the growth of the UK economy.
The budget delivered few surprises for businesses. With changes to business rate increases, funding for research and development (R&D) and scale-up businesses, and a freeze on the VAT threshold for small businesses.
Mr Hammond also confirmed increases in the personal tax allowance and the National Minimum and Living Wage, as well as abolishing stamp duty for a number of first-time buyers.
Business rates – Business rates will switch to being increased by the Consumer Price Index (CPI) rather than the Retail Price Index (RPI) – which is often higher – from April 2018.
VAT – VAT threshold for small businesses will remain at £85,000 for the next two years.
R&D – A further £2.3bn has been allocated for investment in R&D. R&D tax credit will also be increased to 12%.
High-growth scale-up businesses – £20bn of investment for UK knowledge intensive scale-up businesses.
Pubs with a rateable value of less than £100,000 to continue to receive a £1,000 discount on rates they would have paid.
Personal allowance and higher rate threshold – The Chancellor confirmed that the personal allowance will rise from £11,500 to £11,850 and the higher rate threshold from £45,000 to £46,350 from 6 April 2018. He stated that the government will meet its commitment to raise the income tax personal allowance to £12,500 and the higher rate threshold to £50,000, by the end of this Parliament. Once the personal allowance reaches £12,500, it will then rise in line with the Consumer Prices Index (CPI).
National Living Wage (NLW) and National Minimum Wage (NMW) – The National Living Wage will increase as planned from £7.50 to £7.83 from April 2018.
Stamp duty – Stamp duty will be abolished on homes under £300,000 for first-time buyers from 22 November.
Universal Credit – Households applying for Universal Credit will get more upfront support.
Fuel duty – Fuel duty will be frozen for an eighth year.
Duty on beer, wine, cider and spirits will be frozen.
A number of investment initiatives were announced to deal with a range of issues: