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Store Excel Budget Bullets

The key October 2018 budget announcements affecting independent retailers.

National growth forecasts

  • 2019 growth is expected to be 1.6% rather than 1.3%
  • 2020 growth expected to be 1.4% for 2020 against 1.3% previously forecast

Trading

  • Duty on cider & spirits is frozen.
  • Tax on wine will increase with inflation.
  • Tobacco duty escalator will continue at 2%
  • Fuel duty is frozen for the ninth year in a row.

Personal Tax & Pay

  • Personal allowance will rise to £12,500 from current £11,850.
  • Higher rate threshold will start at £50,000 – currently £46,351.
  • National living wage will increase from £7.83 per hour to £8.21 per hour in April 2019. An increase of 4.9%

Small Businesses

  • Business rates for smaller retailers, pubs, restaurants and cafes will be cut by a third over the next two years.
  • Apprenticeship levy for small firms is to be halved to 5% and £695 million will be made available to help small businesses hire apprentices.
  • The current threshold for VAT registration which stands at £85,000 will remain unchanged for a further two years.
  • The Annual Investment Allowance that businesses can offset against tax will rise temporarily from £200,000 to £1 million from January 2019 in a bid to boost private-sector investment. The higher limit will be in force until the start of 2021. 

High Street Support

  • £675 million of co-funding will be made available to create a “Future High Street Fund” to support local councils draw up plans for the transformation of their high streets.
  • A new Digital Services Tax of 2% on revenue will be levied on major digital platforms that make significant profit in the UK. This will be introduced in 2020.

Wider Economy

  • An additional £1bn will spent over five years to help smooth the transition to the Universal Credit system.
  • Stamp duty for first time buyers of shared ownership properties worth up to £500,00 is to be cut.
  • A new plastic packaging tax will be established for April 2022.

David Gilroy

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