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Budget 2018 PREVIEW: What will Philip Hammond say in LAST budget before Brexit? | Personal Finance | Finance

Budget 2018 PREVIEW: What will Philip Hammond say in LAST budget before Brexit? | Personal Finance | Finance preloaderbig


It is also the final official spending statement before Britain is scheduled to leave the bloc at 11pm on March 29 next year.

And with negotiations faltering repeatedly, all eyes will be on the Chancellor as the chances if a no-deal Brexit seem increasingly likely.

But will it be tricks or treats from Mr Hammond in this pre-Halloween Budget?

Here Express.co.uk has listed what could be unveiled in the 2018 fiscal statement.

PENSIONS

Savers will be paying close attention to what the Chancellor has to say about pensions, with fears growing over tax reliefs or the annual allowance being slashed.

While it is not yet clear what Mr Hammond has in store, he has in recent weeks described tax breaks for pensions savings as “eye-wateringly expensive” – further claiming the relief costs the Government £39 billion a year.

For basic-rate taxpayers, the current tax relief on pensions – the amount added into your pot by the Government – currently sits at 20 percent, while higher-rate taxpayers can apply for 40 percent tax relief.

The current annual allowance on pensions – the limit that can be contributed while still receiving tax relief – sits at £40,000.

Budget 2018: What can be expected from Philip Hammond’s spending speech? (Image: GETTY)

philip hammond before the budget  Budget 2018 PREVIEW: What will Philip Hammond say in LAST budget before Brexit? | Personal Finance | Finance preloaderbig

Budget 2018: The Budget was pushed forward so not to clash with Brexit negotiations (Image: GETTY)

Steven Cameron, Pensions Director at Aegon, said: “Pension tax relief is often seen as the big prize, but we believe it would be risky for the Government to rush into fundamental changes right now.

“Moving to basic and higher rate taxpayers receiving the same rate of Government top-up would be extremely complex to introduce and needs proper focus and attention.

“It would also create winners and losers making it a big electoral gamble for a party without a majority.

“While relatively few people are able to make the most of the full £40k allowance, many business owners and self-employed people do rely on using the full amount in good years to offset the years in which they are unable to make contributions to their pension.

“We hope the Chancellor resists any further reduction in how much people can save each year into a pension, particularly given reports of an improvement in public finance projections.”

YOUR PAY PACKET

A total of 31 million people pay income tax in the UK, with the personal allowance – or how much you can earn before being taxed – currently at £11,850.

The Conservatives have already vowed to increase the personal allowance to £12,500 by 2020, so it is almost certain this will go up in the Budget.

The threshold for higher rate tax is also expected to rise to £50,000 by 2020.

Tim Bennett, Partner at Killik & Co, said: “Changes to income tax may be on the cards – one possibility is the Chancellor may bring down the income level at which additional rate tax is paid.

“He should also take the opportunity to eliminate the unfair anomaly whereby certain taxpayers pay income tax at an effective rate of 60 percent thanks to the way the personal allowance is tapered.”

budget 2018 philip hammond red suitcase  Budget 2018 PREVIEW: What will Philip Hammond say in LAST budget before Brexit? | Personal Finance | Finance preloaderbig

Budget 2018: Express.co.uk has listed what could be unveiled in the 2018 fiscal statement (Image: GETTY)

SAVINGS

With an ever-growing number of ISA saving accounts available, experts have suggested now could be the time for the Chancellor to simplify the system.

It comes after claims the popular saving method has become too complicated for savers.

Jon Hall, Managing Director at Masthaven Bank, said: “The simplification of the ISA regime has been a hot topic for some time now and we would welcome this.

“We need to make it far easier for consumers to save for their future.”

philip hammond before the budget  Budget 2018 PREVIEW: What will Philip Hammond say in LAST budget before Brexit? | Personal Finance | Finance preloaderbig

Budget 2018: The timing of the Budget has never been more important with Brexit looming (Image: GETTY)

HOUSING & STAMP DUTY

The housing market will of course be on the agenda for Mr Hammond.

With the Help-to-Buy scheme coming to an end in 2021 – it has allowed house hunters to buy as little as 25 percent or as much as 75 percent of a home and pay rent on the rest – savers will be wondering if an extension of this scheme is on the cards.

Rob McCoy, Senior Product & Business Manager at TMA, said: “Help-to-Buy has undoubtedly had a huge impact on the first time buyer market over the last five years.

“An extension of this, or a variant of the scheme, would be very much welcomed, helping once again to level the playing field when it comes to homeownership.

“Top of my Budget wish list is for the government to leave the buy-to-let market well alone.

“This ceasefire will allow the flurry of recent changes to bed in, providing time for landlords to adjust and in turn, restore some much-needed confidence to the sector.”

And let us not forget that the Chancellor scrapped stamp duty in last year’s Budget for first time buyers on properties costing up to £30,000.

Speculation on this taxation is an additional surcharge of 3 percent of stamp duty could be introduced for foreign buyers looking to purchase a home in the UK.

Mr McCoy continued: “Instead of further raising this punitive tax, a break or waiver for downsizers would go a long way in terms of getting the market moving again, freeing up more housing stock for those further down the ladder.”

HEALTH & SOCIAL CARE

Theresa May has promised an extra £20 billion a year for the NHS in England by 2023, which will be funded through cuts or tax rises.

In terms of social care, Mr Hammond last year pledged an additional £2 billion on social care over the next three years.

The Alzheimer’s Society has recently called on the Chancellor to set aside £2.5 billion for social care in the Budget.

New funding options for later life care in a green paper are due to be published this autumn, while a previously proposed £72,500 cap had been scrapped in December.

Steven Cameron, Pensions Director at Aegon, said: “Our ageing population urgently needs a stable agreement on what the state will pay for and what individuals will have to fund themselves, based on their wealth.

“While implementing a new approach may need to wait until after Brexit is done and dusted, our society can’t afford to keep pushing important policy discussions into the long grass.

“Without this certainty it is nigh on impossible for individuals to plan their finances effectively for later life and at the moment most people hope for the best, but live with a great deal of uncertainty about how much they might need to pay for care if they need it.”

uk money  Budget 2018 PREVIEW: What will Philip Hammond say in LAST budget before Brexit? | Personal Finance | Finance preloaderbig

Budget 2018: Will it be tricks or treats from Philip Hammond in this pre-Halloween Budget? (Image: GETTY)

‘AMAZON TAX’

Reports earlier this month claimed the Chancellor could be set to sting internet giants with a tax based on their revenues.

Known as the ‘Amazon tax’ the idea was said to have been thrown about to help save the crippled UK high street, but latest remarks suggest the move has gone cold on fears it will make online shopping more expensive.

Tim Walford-Fitzgerald and Toby Ryland, partners at H W Fisher & Company, said: “While there is little doubt many retailers would love the Chancellor to take more action in terms of providing further Business Rates relief this seems unlikely.

“Firstly, Local authorities are desperately short of cash and any further reductions in what they are able to collect is likely to heap further pressure on Locally delivered services.

“Equally calls for a so-called Amazon Tax are likely to fall on deaf ears.

“This is not so much about the Chancellor’s lack of willingness to act on such issues as it is an inability to do so.

“An Amazon Tax, or Wharehouse Tax could have unintended consequence with the tax burden falling on much smaller businesses rather than the likes of Amazon themselves.”

BUSINESSES

It was confirmed at the end of last week that Mr Hammond will promise a £1.5 billion cash boost for Britain’s beleaguered high streets in his Budget.

In response to concern about job losses and shop closures in towns and city centres across the country, the Chancellor is to slash business rates by a third for almost half a million small retailers.

He will also propose relaxing planning laws to encourage businesses and launch a new “Future High Streets Fund” to rejuvenate town centres across Britain.

Rumours have also been in overdrive that the Chancellor is set to ditch plans for a VAT tax raid on small firms.

The controversial moved would have seen the current VAT threshold of £86,000 halved to £43,000.

Craig McKinlay, New Business Director, Kensington Mortgages said: “It could have a negative effect on the UK’s small businesses. Self-employed workers form the backbone of the UK economy.

“Many of these individuals already face challenges, even with the things many of us take for granted like getting a mortgage, and thousands of small firms that sit below the £85,000 threshold would face higher costs if this is reduced.”


Source : EXPRESS

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