The 2018 Budget and you
The Chancellor, Philip Hammond delivered his latest budget in October. Here's what it may mean for you.
An increase in the tax free Personal Allowance.
The personal allowance – the amount you can earn without paying any income tax – will be raised from £11,850 to £12,500. This means that a basic rate taxpayer will pay £1,205 less tax in 2019-20 than in 2010-11.
An increase in income tax relief for higher wage earners.
The threshold at which people start paying the higher rate tax will increase from £46,350 to £50,000. This means that in 2019-20, there will be nearly 1 million fewer higher rate taxpayers than in 2015-16.
More money for Universal Credit.
£1 billion has been set aside to top-up payments for those transferring to universal credit from other benefits. Work allowances – what people can earn before their Universal Credit is reduced – will be increased by £1,000/year.
More money for the National Living Wage.
This will rise from £7.83 an hour to £8.21 an hour.
More money for the NHS.
An extra 20.5bn has been committed for the NHS over the next five years.
Additional money for schools.
An extra £400 million will mean £10,000 more for the average primary school and £50,000 more for the average secondary school.
More money for social care.
Local authorities in England will receive a further £650 million in social care funding next year.
More money for road improvements.
Local authorities in England will be given £420 million to fix potholes on roads and renew bridges and tunnels. Much needed after a very cold winter and a very hot summer.
Tax on large digital firms.
To help raise revenue, the Chancellor announced a 2% tax on revenues on larger tech companies, such as Google, Facebook and eBay.
No increase on the annual ISA allowance.
The annual ISA allowance will remain at £20,000 in 2019/20. If you’d be interested in how Al Rayan Bank can help you make the most of your ISA Allowance, you can find out more here.