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You can find the current article at its original source at https://www.theguardian.com/uk-news/2018/oct/28/budget-more-cash-nhs-crackdown-tech-firms-expected-philip-hammond
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| Version 3 | Version 4 |
|---|---|
| Budget: more cash for NHS but crackdown on tech firms expected | Budget: more cash for NHS but crackdown on tech firms expected |
| (2 months later) | |
| How will the budget affect core sectors of the economy and public finances? Here is our checklist of what to expect | How will the budget affect core sectors of the economy and public finances? Here is our checklist of what to expect |
| Brexit costs | Brexit costs |
| Brexit is already costing us at £500m a week, according to a pro-European thinktank – compared with the £350m “dividend” plastered on the sides of the leave campaign bus. The Centre for European Reform’s analysis also suggests that the size of the UK economy is 2.5% smaller than it would have been had remain won the referendum. In cash terms, the public finances have been hit by £26bn a year. | Brexit is already costing us at £500m a week, according to a pro-European thinktank – compared with the £350m “dividend” plastered on the sides of the leave campaign bus. The Centre for European Reform’s analysis also suggests that the size of the UK economy is 2.5% smaller than it would have been had remain won the referendum. In cash terms, the public finances have been hit by £26bn a year. |
| Ending austerity? | Ending austerity? |
| While the economy has suffered a slowdown since the referendum vote, it is not as severe as expected by the Treasury’s independent forecaster, the Office for Budget Responsibility (OBR). | While the economy has suffered a slowdown since the referendum vote, it is not as severe as expected by the Treasury’s independent forecaster, the Office for Budget Responsibility (OBR). |
| Lower-than-expected Whitehall spending and higher VAT and corporation tax receipts since April have help the exchequer more than expected. Borrowing could be just £25bn, compared with forecasts of £33.9bn. | Lower-than-expected Whitehall spending and higher VAT and corporation tax receipts since April have help the exchequer more than expected. Borrowing could be just £25bn, compared with forecasts of £33.9bn. |
| It is not spare money, though, as Theresa May has bullied the chancellor into turning on the spending taps to the tune of an extra £100bn to prove that the age of austerity is over. | It is not spare money, though, as Theresa May has bullied the chancellor into turning on the spending taps to the tune of an extra £100bn to prove that the age of austerity is over. |
| The NHS | The NHS |
| About £20bn is to be pumped into health, including a £2bn increase in mental health spending by 2023-24. However, the extra spending doesn’t account for the deficits already in the health system. Last year, health trusts borrowed £2.8bn to cover shortfalls. | About £20bn is to be pumped into health, including a £2bn increase in mental health spending by 2023-24. However, the extra spending doesn’t account for the deficits already in the health system. Last year, health trusts borrowed £2.8bn to cover shortfalls. |
| Local authority borrowing | Local authority borrowing |
| The chancellor could raise the cap on local authority borrowing to fuel building to ease the housing crisis. It is another of May’s initiatives and will cost the Treasury about £1bn a year to fund. | The chancellor could raise the cap on local authority borrowing to fuel building to ease the housing crisis. It is another of May’s initiatives and will cost the Treasury about £1bn a year to fund. |
| Personal tax thresholds | Personal tax thresholds |
| The Conservative manifesto pledged to increase the level at which people start paying 20p-in-the-£1 tax to £12,500, and the threshold for the higher rate of 40p to £50,000. If instead of increasing the thresholds Hammond freezes them, it would bring in an extra £2bn by 2022-23, and that figure would roughly double the following year. | The Conservative manifesto pledged to increase the level at which people start paying 20p-in-the-£1 tax to £12,500, and the threshold for the higher rate of 40p to £50,000. If instead of increasing the thresholds Hammond freezes them, it would bring in an extra £2bn by 2022-23, and that figure would roughly double the following year. |
| Self-employment loophole | Self-employment loophole |
| A crackdown on BBC stars and other senior public officials who charge for their services using so-called personal service companies to avoid tax is expected to be extended to the private sector. When freelance workers have just one employer, HMRC says they should pay full income tax and national insurance. Hammond has confirmed that the change – known as the IR35 rule – is under consideration. | A crackdown on BBC stars and other senior public officials who charge for their services using so-called personal service companies to avoid tax is expected to be extended to the private sector. When freelance workers have just one employer, HMRC says they should pay full income tax and national insurance. Hammond has confirmed that the change – known as the IR35 rule – is under consideration. |
| Pensions | Pensions |
| Current tax relief on private pension savings is “eye-wateringly expensive”, according to Hammond. It is estimated to cost £36bn in lost tax. No wonder the Treasury has hinted that it is considering a range of options for reform. The chancellor is expected to cut the annual amount that can be put in a private pension, from the current level of £40,000. | Current tax relief on private pension savings is “eye-wateringly expensive”, according to Hammond. It is estimated to cost £36bn in lost tax. No wonder the Treasury has hinted that it is considering a range of options for reform. The chancellor is expected to cut the annual amount that can be put in a private pension, from the current level of £40,000. |
| The triple lock on state pension – which guarantees that basic state pensions rises in line with either inflation, earnings or at 2.5% (which ever is greater) – is safe in Hammond’s hands. | The triple lock on state pension – which guarantees that basic state pensions rises in line with either inflation, earnings or at 2.5% (which ever is greater) – is safe in Hammond’s hands. |
| Welfare | Welfare |
| Hammond is unlikely to scrap universal credit, the scheme that integrates housing benefit, jobseeker’s allowance, employment and support allowance, income support, working tax credit and child tax credit into a single monthly payment. He reckons that it provides a better incentive for people to get back into work, but critics say it is hurting thousands of families. He is expected to announce further transition relief. | Hammond is unlikely to scrap universal credit, the scheme that integrates housing benefit, jobseeker’s allowance, employment and support allowance, income support, working tax credit and child tax credit into a single monthly payment. He reckons that it provides a better incentive for people to get back into work, but critics say it is hurting thousands of families. He is expected to announce further transition relief. |
| Motorists | Motorists |
| Hammond will announce £28.8bn for a fund to invest in strategically important roads between 2020 and 2025. About £420m could be spent on potholes. | Hammond will announce £28.8bn for a fund to invest in strategically important roads between 2020 and 2025. About £420m could be spent on potholes. |
| May has already promised to freeze fuel duty for the forthcoming year at a cost of about £800m, adding to the £9bn cost of not raising the duty since 2010. | May has already promised to freeze fuel duty for the forthcoming year at a cost of about £800m, adding to the £9bn cost of not raising the duty since 2010. |
| Tech tax | Tech tax |
| The chancellor is expected to announce measures to increase the amount of tax paid by technology companies such as Facebook, Amazon and Google. Hammond has already said the UK might push ahead with a “digital services tax” if there was no rapid international agreement. Five of the biggest US technology firms – Facebook, Google, Apple, Microsoft and Cisco – could be depriving the Treasury of more than £1bn a year, according to the Tax Watch thinktank. | The chancellor is expected to announce measures to increase the amount of tax paid by technology companies such as Facebook, Amazon and Google. Hammond has already said the UK might push ahead with a “digital services tax” if there was no rapid international agreement. Five of the biggest US technology firms – Facebook, Google, Apple, Microsoft and Cisco – could be depriving the Treasury of more than £1bn a year, according to the Tax Watch thinktank. |
| Business rates | Business rates |
| The chancellor will unveil a temporary cut in business rates for almost half a million small high street shops. The cut, which is designed to help them compete with the likes of Amazon, which will cost about £1.5bn. | The chancellor will unveil a temporary cut in business rates for almost half a million small high street shops. The cut, which is designed to help them compete with the likes of Amazon, which will cost about £1.5bn. |
| Budget 2018 | Budget 2018 |
| Budget | Budget |
| Philip Hammond | Philip Hammond |
| Brexit | Brexit |
| Austerity | Austerity |
| NHS | NHS |
| Tax and spending | Tax and spending |
| news | news |
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