Budget Briefing – 22nd November 2017
The Chancellor has delivered the last Autumn Budget in 2017; please see below details of those policies that may affect our clients:
Budget Policy Overview
The United Kingdom has a bright future. The fundamental strengths of the UK economy will support growth in the long term as the UK forges a new relationship with the European Union (EU). The Budget prepares for that: supporting families and business in the near term; setting a path to a prosperous, more open Britain; and building an economy that is fit for the future.
The Budget sets out actions the government will take to:
- Support more housebuilding, raising housing supply by the end of this Parliament to its highest level since 1970, to make homes more affordable in the long term and help those who aspire to homeownership.
- Prepare for exiting the EU and ensure a smooth transition by setting aside an additional £3 billion for government.
- Establish the UK as a world leader in new technologies such as artificial intelligence (AI), immersive technology, driverless cars, life sciences and FinTech.
- Give everyone the skills to succeed in the modern economy and get better-paid jobs.
- Expand the National Productivity Investment Fund (NPIF) to support innovation, upgrade the UK’s infrastructure and underpin the government’s modern Industrial Strategy.
- Invest over £6.3 billion of new funding for the NHS to improve A&E services, reducing waiting times and improving performance for treatment after referral, and to transform and integrate patient care.
- Provide more support in the short term for households, reducing costs of living, and boosting wages for the low paid through the National Living Wage (NLW)
By investing in the future, the Budget will ensure that every generation can look forward to a better standard of living than the one before and ensures young people have the skills they need to get on in life.
Energy and Environmental Taxes
Fuel Duty
The freezing fuel duty for the eighth year in a row, saving the average driver £160 a year.
Alternative Fuels
The government will review whether the existing fuel duty rates for alternatives to petrol and diesel are appropriate, ahead of decisions at Budget 2018. In the meantime, the government will end the fuel duty escalator for Liquefied Petroleum Gas (LPG). The LPG rate will be frozen in 2018-19, alongside the main rate of fuel duty.
Total Carbon Price
The government is confident that the Total Carbon Price, currently created by the combination of the EU Emissions Trading System and the Carbon Price Support, is set at the right level, and will continue to target a similar total carbon price until unabated coal is no longer used. This will deliver a stable carbon price while limiting cost on business.
Climate Change Levy (CCL)
Budget 2016 announced the rebalancing of gas and electricity main rates; the government will set CCL main rates for the years 2020-21 and 2021 22 at Budget 2018. In addition, and to ensure better consistency between portable fuels for commercial premises not connected to the gas grid, the government will freeze the CCL main rate for LPG at the 2019-20 level until April 2022.
To ensure that the CCL exemptions for businesses that operate mineralogical and metallurgical processes remain operable after EU exit, the government will clarify the definition of the exemptions in Finance Bill 2018-19. The revised definition will also ensure that the exemptions work better in landlord-tenant situations.
Climate Change Levy Main Rates
| Taxable Commodity | Rate from 01/04/2017 | Rate from 01/04/2018 | Rate from 01/04/2019 |
|---|---|---|---|
| Electricity (£ per kWh) | 0.00568 | 0.00583 | 0.00847 |
| Natural gas (£ per KWh) | 0.00198 | 0.00203 | 0.00339 |
| LPG (£ per kg) | 0.01272 | 0.01304 | 0.02175 |
| Other taxable commodities (£ per kg) | 0.01551 | 0.01591 | 0.02653 |
Climate Change Levy Reduced Rates
| Taxable Commodity | Rate from 01/04/2017 | Rate from 01/04/2018 | Rate from 01/04/2019 |
|---|---|---|---|
| Electricity | 10% | 10% | 7% |
| Natural gas | 35% | 35% | 22% |
| LPG | 35% | 35% | 22% |
| Other taxable commodities | 35% | 35% | 22% |
Enhanced Capital Allowances (ECAs): Energy-Saving Technologies
The list of designated energy-saving technologies qualifying for an ECA, which support investment in energy-saving plant or machinery that might otherwise be too expensive, will be updated through Finance Bill 2017-18.
First Year Tax Credits
The government will extend the First Year Tax Credit scheme until the end of this Parliament, thereby making sure that loss-making companies are encouraged to invest in energy-efficient technology. The credit rate will be set at two-thirds the rate of corporation tax.
Reducing Plastics Waste
The government will launch a call for evidence in 2018 seeking views on how the tax system or charges could reduce the amount of single-use plastics waste, building on the success of the existing plastic carrier bag charge.
Tackling Waste Crime
From 1 April 2018, operators of illegal waste sites will become liable for Landfill Tax, and those who continue to flout the rules will face tough civil and criminal sanctions. This follows a positive response to the consultation announced at Spring Budget 2017. In addition, the government is providing £30 million extra funding over the next four years to help the Environment Agency tackle waste crime and reduce the harm caused to the environment and to legitimate operators.
Landfill Communities Fund
The government will set the Landfill Communities Fund for 2018-19 at £33.9 million, in accordance with the announcement at Spring Budget 2017 that the cap on contributions by landfill operators would be set at 5.3%.
Aggregates Levy
The government will freeze Aggregates Levy rates for 2018-19 at £2 per tonne but will return to index-linking the Levy in the longer term. Following consultation, the government has decided against introducing an exemption from the Aggregates Levy for aggregates extracted when laying underground utility pipes.
Ultra-low Emission Vehicles
To support the transition to zero emission vehicles, the government will regulate to support the wider roll-out of charging infrastructure; invest £200 million, to be matched by private investment into a new £400 million Charging Investment Infrastructure Fund; and commit to electrify 25% of cars in central government department fleets by 2022.
Electric Vehicles
From April 2018, there will be no benefit in kind charge on electricity that employers provide to charge employees’ electric vehicles.
Sustainable Investment in Energy
The government will continue to support low carbon electricity as it becomes more cost-competitive, including through up to £557 million for further Contracts for Difference. The government is also committed to keeping energy costs as low as possible. Therefore, in order to protect consumers, the government will not introduce new low carbon electricity levies until the burden of such costs are falling. On the basis of the current forecast, this means there will be no new low carbon electricity levies until 2025. All existing commitments will be respected
Green Investment Bank (GIB)
On 20th April 2017, the government announced the sale of the UK Green Investment Bank plc (GIB) to Macquarie Group Limited.
2EA® are registered Low Carbon Energy Assessors, Consultants and ESOS Lead Assessors, offering both energy management and reduction services ranging from CCL/CHPQA Management to Energy Saving Opportunity Scheme (ESOS) and Carbon Reduction Commitment (CRC) consultancy.
For more information, please contact us either by email to info@2ea.co.uk or by calling 01293 521 350.
