October saw Chancellor Philip Hammond deliver the 2018 budget update to the House of Commons. Presenting to the Deputy Speaker and an animated crowd, many tuned in to watch the update live on tv and through streaming platforms.
Nearly all types of businesses will be impacted somehow by the changes, so we’ve compiled a quick guide to help you get up to speed.
Here’s the top five subjects you need to know about:
- Salary
- Housing
- Mental health
- Schools
- Self-employment
salary and tax.
One of the key takeaways from yesterday’s speech was that around wages and the amount of tax payable.
Changes to the national minimum wage results in an increase of 38p per hour to £8.21 for over 25s in April 2019. Representing a 4.9% rise and an annual increase of £690 for a full-time worker, employees will see their pay rise above current levels of inflation.
For higher earners, the higher rate of tax, which starts to be paid at £46,350 at the moment, will start at £50,000 in April - 12 months earlier than was originally pledged, boosting take home pay of millions. Deloitte have said that this, combined with the personal income changes, will save higher rate taxpayers in England and Wales around £860 annually.
the housing industry.
Last year first time buyers celebrated when it was announced that they would be completely exempt from paying stamp duty on homes up to £300,000, and benefit from reduced tax on purchases up to £500,000. Yesterday we discovered stamp duty exemption is being extended to those buying shared ownership properties, and it’s being backdated to the last budget so that recent buyers can be reimbursed.
Housebuilding is also seeing an injection of cash. The government will allocate an additional £500million into its housebuilding fund with the intention to increase production of new homes across the country, resulting in an additional 650,000 new houses. The UK house building boom looks like it’s set to continue, and as we face a demand for technical and professional workers with residential market experience, demand for house builders will continue to rise. From qualified site managers and quantity surveyors, to labourers and ground workers, Randstad’s specialist housing team can help you get in before the rush and build your experienced team.
mental health.
With one in four people being affected by mental illness, mental ill health remains high on the agenda for employers. Acknowledging the significant gap in services for those suffering with mental ill health, the Chancellor announced increased funding and employment support for sufferers. The NHS will increase mental health spending by more than £2 billion a year by 2023-24. Further to this, 55,000 adults with severe mental ill health will be provided with help by the health service to secure employment, through a work placement and support scheme.
The commitment should lead to mental health support being available in every large A&E department around the country. Special ambulances will be also created to treat people with conditions like depression and anxiety, as part of the new measures to ensure mental illnesses are treated as seriously as physical ones.
Last year Randstad surveyed 3,400 construction, property and engineering workers to understand the impact of mental health in the industry. Top tops on how to manage employees with mental health difficulties returning to work are available here.
the education sector.
Yesterday we discovered that schools will receive £400 million in extra capital funding this year.
The allocated the in-year “bonus” for schools is said “to help our schools buy the little extras they need”. This funding is to be spent on capital projects like equipment and maintenance, as opposed to revenue outlays, like staff salaries.
The Chancellor said that there is thought to be an average payout of £10,000 per primary school or £50,000 per secondary schools.
With the importance of STEM in today’s society becoming prominent once again, the Budget also includes £10 million for a "regional trial to test how to improve retention of early career maths and physics teachers". It’s been previously reported that the UK STEM skills shortage costs the sector an incredible £1.5 billion a year in recruitment, temp staffing, salaries and additional training courses, and there are more than 173,000 current vacancies that require training in the STEM field. Hopefully this investment helps to contribute towards solving the problem.
self-employment.
The Treasury believes a third of people claiming self-employed status as a "personal service company" are actually working in the same way as employees and should pay more income tax and national insurance (BBC).
With IR35 rules recently being changed for the public sector and this way of working, as of April 2020, it will be the same for the private sector. Self-employed and gig workers will need to be familiar with IR35 tax legislation, which is designed to combat tax avoidance by workers supplying their services to clients via an intermediary, such as a limited company.