The Chancellor of the Exchequer, Philip Hammond, presented his Budget to the UK Parliament on Monday 29 October 2018.
Based on having met the government’s fiscal rules three years ahead of schedule, and in preparation towards leaving the European Union, the Budget emphasised job creation and tax cuts for families and businesses, while expecting to reduce the deficit and public debt, which peaked in 2016-17.
Highlights
- From April 2019, the Personal Allowance – the amount earned before having to pay income tax – will increase by a further £650, to £12,500. Additionally, the amount people will have to earn before they pay tax at 40% will increase from £46,350 to £50,000.
- Small retail businesses will see their business rates bills cut by a third for two years.
- The National Living Wage will increase from £7.83 an hour to £8.21. This will benefit around 2.4 million workers, and is a £690 annual pay rise for a full-time worker.
- From April 2020, large social media platforms, search engines and online marketplaces will pay a 2% tax on the revenues they earn which are linked to UK users.
- Additionally, the Chancellor announced the introduction of a new tax on the manufacture and import of plastic packaging that contains less than 30% recycled plastic; the case for introducing a levy on the production of disposable plastic cups is also being assessed.
Distributional analysis and policy costings
Distributional analysis and policy costings were also published as part of the Budget documents.
The distributional analysis sets out the distributional impact on households of tax, welfare and public service spending decisions announced since Autumn Statement 2016. It also presents analysis of the wider economic context, focusing on trends in employment, earnings and household incomes.
The policy costings document sets out the assumptions and methodologies used in the government’s costing of policy decisions announced since Autumn Budget 2017. For each decision, it contains a description of the measure, the base, the methodology for the costing (including relevant adjustments for behavioural responses) and highlights main areas of additional uncertainty.
(Source: UK Budget 2018: documents | Summary)
Women’s Budget Group: Pre-Budget Policy Briefings
As a further source for distributional analysis, the UK Women’s Budget Group has updated their briefings on the gender impact of policy in 15 areas related to tax and transfers.
The Women’s Budget Group (WBG) is an independent network of leading academic researchers, policy experts and campaigners that monitors the impact of government policies on men and women.
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