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Budget 2018: what it means for your finances

John Fitzsimons
30 October 2018

Philip Hammond, the Chancellor of the Exchequer, has now finished delivering this year’s Budget.

As always, some of it was leaked in advance, but there were plenty of important announcements in there. Let’s take a look at what they mean for your money.

Tax changes

The big change for most of us concerns income tax. Everyone gets a personal allowance, which is how much you can earn each year before paying tax on your earnings. For this tax year, it stands at £11,850.

From next April, it’s being raised to £12,500 - a year ahead of when the government had promised to hit this level.

On top of that, the government has also increased the level at which you start paying the higher rate of income tax. Currently you pay 40% on your earnings above £46,351, but that is also going up from next April to £50,000.

The government reckons that means one million fewer people will pay the higher rate of income tax.

Help with problem debts

The government is clearly concerned about the debt issues that many Brits are lumbered with, which is why it has unveiled a trio of new initiatives to try to ease that burden.

For starters, there’s the ‘breathing space’ scheme which will allow people who are struggling with their bills to get a 60-day break in order to try to get back on track.

There’s also the promise of an emergency loan scheme, with loans offered on an interest-free basis to those in need.

Finally (and this one is slightly out there) there’s a £2m prize fund for entrepreneurs who manage to come up with some clever tech which will allow ethical lenders to compete more effectively against high-interest lenders, like payday lenders.

Potholes

Anyone who has ever had the misfortune of driving over a large pothole can vouch for the sheer amount of damage that can be incurred. This can lead to enormous repair bills - yet another expense for motorists to worry about.

In a bid to tackle the ever-growing problem of potholes on UK roads, the government has announced a further £420m is being made available immediately to get our roads into better shape.

Stamp Duty

In last year’s Budget, the Chancellor announced a significant change to stamp duty. First-time buyers no longer pay any stamp duty when purchasing a home worth up to £300,000. The amount they pay on properties worth up to £500,000 is also reduced.

This has been a popular move, as stamp duty is a potentially significant added expense when it comes to getting onto the housing ladder.

The exemption has now been extended to those purchasing on a shared ownership basis. In addition, that has been backdated to last year’s Budget. So if you’ve bought a shared ownership home, then you can get the tax back.

Fuel Duty

The tax that we pay at the petrol pump has been frozen once again - the ninth year in a row in which it has been kept at the same level.

There’s a new 50p coin coming

To mark our exit from the European Union, a new 50p is to be minted. It will include the date 29th March 2019.

What’s that all about? In case you weren’t around at the time, a commemorative 50p coin was struck when we first joined what was then the European Economic Community back in 1973.

Watch this space

Recent years have seen a succession of big Budget announcements unravel in the days after the speech, as the full implications and details become clear. In other words, watch this space, as there may be changes and U-turns still to come.

by John Fitzsimons

John Fitzsimons is a freelance financial journalist who has been writing about money for more than a decade. appearing in the likes of the Sunday Times, the Mirror, the Sun and Forbes.

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