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Budget 2018

29 October 2018

Summary of key budget points.

If necessary, for example if there is no deal on Brexit, next March’s Spring Statement could be upgraded to a full Budget. This could mean that some of the Budget 2018 proposals will be amended.

Link to Budget 2018 documents

Benefits

Universal credit

The Chancellor states universal credit is here to stay, but announces the following measures:

  • £1 billion over five years to aid transition/migration – this additional support will be announced in the managed migration regulations, when they are published.

  • The amount that households with children, and people with disabilities can earn before their Universal Credit award begins to be withdrawn – the Work Allowance – will be increased by £1,000 from April 2019.

  • From July 2020, extension of a fortnight’s worth of support for Housing Benefit claimants during their transition to Universal Credit to cover income-related elements of Jobseeker’s Allowance and Employment and Support Allowance, and Income Support.

  • From October 2019, the government will reduce the maximum rate at which deductions can be made from a Universal Credit advance award from 40% to 30% of the standard allowance.

  • From October 2021, the government will increase the period over which advances will be recovered, from 12 to 16 months.

  • Extension of the 12-month grace period (the period before the Minimum Income Floor applies) to all gainfully self-employed people. This will be introduced from July 2019 and implemented fully from September 2020.

Industrial disablement benefit

Dupuytren’s contracture will be added to the existing list of over 70 prescribed diseases for which Industrial Injuries Disablement Benefit is payable.

Parental bereavement leave and pay

A new statutory entitlement to two weeks leave for employees who suffer the death of a child under 18, or a stillbirth after 24 weeks of pregnancy. Employed parents will also be able to claim pay for this period, subject to meeting eligibility criteria. This entitlement will come into force in April 2020.

Pension credit

The government will delay the transfer of rent support from Housing Benefit to Pension Credit by 3 years, to ensure that this transfer aligns with the full implementation of Universal Credit.

Charity taxes

The government will:

  • Increase the upper limit for trading that charities can carry out without incurring a tax liability from £5,000 to £8,000 where turnover is under £20,000, and from £50,000 to £80,000 where turnover exceeds £200,000.

  • Allow charity shops using the Retail Gift Aid Scheme to send letters to donors every three years when their goods raise less than £20 a year, rather than every tax year.

  • Increase the individual donation limit under the Gift Aid Small Donations Scheme to £30, which applies to small collections where it is impractical to obtain a Gift Aid declaration.

Health

The government has confirmed earlier announcements of an extra £20.5bn for the NHS over the next five years.

An extra £2bn a year to be given to mental health services

A new Mental Health Crisis Service is to be part of a new NHS plan new NHS Plan.

“The NHS will invest up to £250 million a year by 2023-24 into new crisis services, including:

24/7 support via NHS 111; children and young people’s crisis teams in every part of the country; comprehensive mental health support in every major A&E by 2023-24; more mental health specialist ambulances; and more community services such as crisis cafes. The NHS will also prioritise services for children and young people, with schools-based mental health support teams and specialist crisis teams for young people across the country. For adults, the NHS will expand access to the Individual Placement Support programme to help those with severe mental illness find and retain employment, benefitting 55,000 people by 2023-24.”

£10million will be given to the Armed Forces Covenant Fund Trust to support veterans with mental health needs.

Housing

Limiting lettings relief to owners of properties in shared occupancy with the tenant. The government will consult on these changes. There will be no changes to the 36 months final period exemption available to disabled people or those in a care home.

An additional £55 million in 2018-19 for the Disabled Facilities Grant to provide home aids and adaptations for disabled children and adults on low incomes.

£900m in business rates relief for small businesses and £650m to rejuvenate High Streets, including converting commercial property areas to residential housing areas (already announced).

Pensions

The lifetime allowance for pension savings will increase in line with CPI for 2019/20, rising to £1,055,000.

Public toilets

New mandatory business rates relief for public lavatories.

Social care

Prior to the expected publication of the social care green paper, an extra £650m of grant funding will be given to English Authorities for 2019/20

Tax and National Insurance

The personal allowance will go up to £12,500 from April 2019, one year earlier than planned. The threshold will remain at the same level in 2020-21 and then increase by CPI.

The high rate threshold will also increase to £50,000 from April 2019.

Work

National Living Wage (NLW) and National Minimum Wage (NMW)

The government will increase the National Living Wage by 4.9% from £7.83 to £8.21 from April 2019.

The National Minimum Wage rates to apply from April 2019 will rise from:

£7.38 to £7.70 per hour for 21 to 24 year olds

£5.90 to £6.15 per hour for 18 to 20 year olds

£4.20 to £4.35 per hour for 16 to 17 year olds

£3.70 to £3.90 per hour for apprentices

The government will set out the Low Pay Commission’s (LPC) remit for the years beyond 2020. In the coming months, it will consult with the LPC and others on this new remit, and as it sets policy will take account of the potential impact on employment and economic growth.