There had been much speculation before the Chancellor stood up, would he confirm the PM’s earlier statement that it was the end of austerity and with the uncertainty over Brexit would he really have much to say?
In terms of austerity he adopted a half-way house saying on a number of occasions ‘we are near the end of austerity’. This was reflected in a number of give-aways, the previously announced NHS Budget increase to £20.5 billion by 2023/24, £2 billion being allocated to mental health services; and the surprise £420 million immediately available to local highway authorities to help with potholes and road repairs.
For businesses he showed he has been listening with increased Business Rates Relief to exempt more business properties, increased tax relief on capital expenditure with a five-fold increase in the Annual Investment Allowance from January 2019 and the proposed introduction of a Structures and Building allowance of 2% per annum for the construction of new non-residential properties.
For individuals he has announced what will be a tax reduction for millions by increasing the personal allowance to £12,500 and the higher rate threshold to £50,000 from April 2019, a year earlier than planned.
With a better than expected economic outlook Fiscal Phil has managed to achieve all these give-aways without any notable tax increases. There were still a few surprises hidden in the detail which will need consideration for businesses and individuals.
Restrictions have been applied to Principle Private Residence Relief to prevent perceived abuse of Lettings Relief. Entrepreneurs’ Relief has been restricted with the qualifying ownership period extended to 24 months, and hidden in the detail a need to be entitled to 5% of the distributable profits, however, it is has been retained, with many having predicted it could be abolished.
It was also pleasing to hear that the VAT registration limit has been left untouched, at least until the impact of Brexit is known.
Overall the statement is one of hope and looking to demonstrate that the UK is open for business. However, the one caveat underlying all of the positivity is the uncertainty of what the Brexit Deal may ultimately be, we are reminded of this with the Chancellor’s opening the door on the Spring Statement becoming a full Budget if any Brexit Deal has a negative impact on any of the economic assumptions underlying this statement.
CLICK HERE to read our full summary of the Chancellor's Autumn Budget 2018.