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UK Autumn Budget – a Brexit Budget?

In this week’s Autumn Budget for the UK, Chancellor Philip Hammond has put aside £500m to cover the cost of a “no deal” Brexit – and this isn’t great news for expats. The Chancellor “said that there was plenty of ‘headroom’ should he need to borrow more in a possible emergency deal if Britain leaves the EU without a Brexit trade agreement.” (Telegraph.co.uk) This means Chancellor Hammond thinks there still might be a “no deal” Brexit – which would threaten pension and insurance payments to the EEA from the UK, as well as hit the value of the UK Pound, which would in turn make life more expensive for expats living off their UK pensions outside of the UK. Of interest to expats looking to buy in the UK from overseas, Holborn IFA Keren Bobker reports that, “there is to be a consultation on Stamp Duty Land Tax (SDLT) for non-residents. The government will publish a consultation in January 2019 on a SDLT surcharge of 1% for non-residents buying residential property in England and Northern Ireland. No mention of Scotland or Wales.”  

Popular budget measures

Of the 86 measures in this Autumn’s budget, popular measures for Brits living in the UK include:
  • First time buyers: stamp duty to be scrapped for shared ownership properties worth up to £500,000.
  • National Living Wage up by 4.9% – from £7.83 to £8.21 per hour.
  • Fuel duty frozen for the ninth year in a year.
  • Duty frozen on beer, cider and spirits.
  • £1bn pledged to ease transition to Universal Credit (the new UK benefits system).
  • Small businesses: £900m earmarked to cut business rates – this measure is projected to give nine out of ten independent shops, pubs and restaurants savings of up to £8,000 each.
  • Standard personal tax allowance confirmed to rise from £11,850 to £12,500 in April 2019. The higher rate threshold will also rise to £50,000. These cuts will be a year early.
  • £420m to be made immediately available to local authorities to deal with the UK’s highway potholes.
  • A £400m “bonus” for schools.
 

Other budget measures

  • Tobacco tax increases by inflation plus 2%.
  • HMRC bumped up list of creditors in insolvency scenarios.
  • 2% digital tax to be levied only on tech giants – not UK start-ups.
  • An extra £160m for counter-terrorism police forces.
  • £1bn extra for the UK’s armed forces.
  Overall, there’s optimistic news from the Office for Budget Responsibility, which has upgraded its growth forecast for 2019 from 1.3% to 1.6%. Financial experts believe that, with Brexit still hanging in the wind, the UK Spring Statement could be upgraded to a full Budget to deal with a finalised Brexit solution.

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