UK Budget 2018 Highlights
The UK Budget 2018 was presented on October 29, 2018. We give below the key highlights of the budget:
- Digital Services Tax (DST):
A new 2% digital services tax on revenue that can be linked to the UK users will be applicable on big technology companies** from April, 2020.
** Large social media platforms, search engines and online marketplaces, that are profitable and have global revenue above GBP 500 million.
- Employment Allowance (EA):
Employers that have National Insurance contributions (NICs) bill below £100,000 in their previous tax year will only be eligible for the EA. This allowance provides relief of up to £3,000 to businesses. Presently even the large employers are entitled to this benefit.
The amount of R&D tax credit benefit for qualifying loss-making small company in any tax year will be subject to the cap of three times of company’s total PAYE and NICs liability for that year from April, 2020.
Contribution to apprentice levy by small companies will be reduced from 10% to 5%. The effective date for the same is yet to be announced.
- The Personal allowance threshold will increase from £11,850 to £12,500. This is the threshold below which no tax is payable by the individuals. In case of the 40% tax rate slab, the threshold will increase from £46,350 to £50,000. Both changes will be effective from April 2019.
- Minimum wages will increase from £7.83 per hour to £8.21 per hour from April 2019.
The government is providing £500 million of additional funding for departments to prepare for Brexit for 2019-20. This is on top of the £1.5 billion already announced for that year.
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