Budget 2018: three things you might have missed
Beer drinkers will be toasting the Chancellor, but self-employed workers feel short changed
Chancellor Philip Hammond has delivered his final Budget before Brexit, declaring yesterday that the end of austerity was in sight as he boosted spending.
“The Chancellor has significantly eased – but not ended – austerity for public services,” Torsten Bell, director of the Resolution Foundation, told The Guardian. “However, tough times are far from over.”
While the increase in financial support for the armed forces and a boost in funding for mental health services dominated headlines, other new measures fell under the radar. Here are a few Budget announcements you might have missed:
Hammond used the Budget to announce a new tax on the manufacturing and import of plastic packaging that contains less than 30% recycled material.
“We need to take more responsibilities in our use of plastic, which is convenient for consumers but deadly to our oceans and planet,” he said.
However, the Chancellor’s commitment did not extend to a introducing a tax on takeaway plastic cups, The Independent reports.
Environmental groups condemned the omission, with Greenpeace UK executive director John Sauven accusing the Treasury of “missing the memo” about the global plastic problem.
“We’re currently in the middle of a plastics pollution crisis and yet the Chancellor failed to take even small steps towards stemming the flow of single use plastics by choosing not to introduce a tax on disposable coffee cups and ignoring calls for a tax on brand new plastic,” he said.
Freeze on alcohol duty
“In an early Christmas present for drinkers and struggling pubs across the country, the Chancellor scrapped a planned tax hike in line with inflation, which would have seen prices rise by 3.4%,” The Sun says. The duty freeze on most beer, cider and spirits comes after industry groups warned that a tax hike could lead to more closures and job losses.
Brigid Simmonds, chief executive of British Beer & Pub Association, said: "Pub-goers across the UK will be toasting the Chancellor tonight following his decision to freeze beer duty. Overall, this has been a great Budget for pubs and pub-goers. Cheers Phil!”
However, wine duty will still rise, adding 7p to a bottle of wine and 9p to a bottle of fizz from 1 February 2019, the newspaper reports. Some high-strength ciders will also be subject to a higher tax.
New tax on freelance workers
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, the BBC reports.
“Having changed the rules on this in the public sector, it will now do the same in the private sector from April 2020,” the broadcaster says. “However, this will only be used for those working for large and medium-sized businesses.”
The move is the biggest tax earning measure in this year’s Budget, according to the Financial Times, and is expected to raise £3.1bn in the four years after its introduction.
But groups representing freelance workers swiftly condemned the move. “It is a short-term tax grab that will do lasting damage to the economy by taxing out of existence the smallest and most agile businesses,” says IPSE.
“The off-payroll rules are so complex and crude that genuinely self-employed people will be swept up by the government’s smash-and-grab mentality and in many cases taxed out of operation,” it added.