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Spring Statement 2018 – Key Measures

26 March 2018

The Chancellor’s 2018 Spring Statement earlier this month gave the government the opportunity to consider the longer-term fiscal challenges ahead of Brexit, and initiate consultations on how these can be addressed. Following this, we have put together an overview of the measures announced in the Statement, along with the key changes to take place in 2018/2019 and beyond.

Measures announced in the Statement:

  • Business rates: the next revaluation will be brought forward from 2022 to 2021
  • Full-fibre broadband: the first wave of funding to provide over £95m for 13 areas across the UK
  • House building: the Housing Growth Partnership will be more than doubled to £220m
  • City transport: the government is inviting bids from cities across England for the remaining £840m of the £1.7bn fund announced in the 2017 Autumn Budget
  • Apprenticeships: £80m of funding to be released to support small businesses
  • Pension Lifetime Allowance: to rise from £1,000,000 to £1,030,000 in line with CPI for 2018/19
  • National Living Wage (NLW) and National Minimum Wage (NMW): From 1 April 2018 both the NLW and NMW will increase for all workers

Key changes for 2018/19

  • Income tax: the personal allowance will rise from £11,500 to £11,850
  • Car fuel benefit rates: the benefit-in-kind rates for cars will increase significantly. In addition, the taxable diesel car benefit for diesel cars will rise from 3% to 4%, although the maximum fuel rate remains at 37%
  • Making Tax Digital (MTD): HMRC is piloting MTD for VAT during 2018, ahead of its introduction in April 2019
  • Dividend Allowance: to be reduced from £5,000 to £2,000
  • Compulsory employer pension contributions: employers will need to contribute at least 2% on qualifying pensionable earnings for eligible jobholders
  • Residence Nil-Rate Bands (RNRB): the inheritance tax RNRB will rise to £125,000
  • General Data Protection Regulation (GDPR): GDPR is set to come into effect on 25 May 2018

Future changes

  • Tax relief on training and skills: the government will consult on extending the current tax relief to support the self-employed and employees when they fund their own training
  • Entrepreneur’s Relief: the government is inviting views on changes to ensure that the current entitlement does not discourage entrepreneurs from seeking external finance
  • Cash and digital payments: the government is consulting on ways to support people and businesses who use digital payments and also ensure those who need to, can still pay with cash
  • VAT registration threshold: a new consultation examining the effect of the current threshold will run until 5 June 2018
  • VAT, Air Passenger Duty (APD): the government is seeking evidence on the significance of any impacts that VAT and/or APD have on tourism
  • Single-use plastic waste: the government is seeking views on using the tax system to encourage responsible use of plastic

For further advice on any of the topics raised, please contact a member of our team on 01903 234094 or email sam@starboxaccountants.com

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