Budget 2018: Beer duty frozen, new tax on tech giants and £420 million for potholes

Chancellor Budget 2018

Philip Hammond holds the red case as he departs to announce the 2018 Budget. Image: Getty

Monday, October 29, 2018

Among the major announcements in this year's Autumn Budget was the introduction of a new UK Digital Services tax, a freeze on beer duty and millions in funding for local highway authorities to tackle potholes with. 

Here's your guide to all the key points from the Budget.


Mental health & social care

Mr Hammond revealed a new NHS mental health crisis service, which will include mental health support in every major A&E department, more mental health ambulances, "safe havens" in communities and a 24-hour mental health crisis hotline.

The service is part of the NHS 10-year plan, and will be covered by the £20.5 billion of government funding per annum, announced by Theresa May back in June.


The chancellor said the new mental health service will work to end the "tragedy" of "too many lives lost to suicide".

Mr Hammond also announced that local authorities in England will get an extra £650 million of grant funding for 2019/20 to bolster social care.



As the UK continues negotiations with the EU, Mr Hammond revealed he has increased the amount allocated for Brexit preparations to £2 billion for 2019/20.

The chancellor previously allocated £1.5 billion for 2019/20 in last year's Budget.



A total of £420 million has been made immediately available to local highway authorities to spend on tackling potholes, bridge repairs and other minor works in this financial year.

The announcement was welcomed by Conservative MP Andrea Jenkyns, who quickly took to Twitter to remind her constituents of her 'pothole patrol' Whatsapp hotline.


Duties and alcohol

Beer duty will be frozen, as will that on cider and spirits, however, wine will continue to rise and white ciders will be taxed at a new higher rate.

Announcing the freeze on spirits, Mr Hammond said: "We can all afford to raise a wee dram to Ruth Davidson on the arrival of baby Finn saving 2p on a pint of beer, 1p on a pint of cider, and 30p on a bottle of Scotch or gin."



The tobacco duty escalator will continue to rise at inflation plus 2 per cent.

Fuel duty will be frozen for the ninth successive year.


Digital Services tax

In April 2020 the UK will introduce the Digital Service tax, aimed at tech giants which earn at least £500 million a year in global revenues.

The new tax is expected to raise over £400 million a year, and will apply to social media platforms, internet marketplaces and search engines.

Mr Hammond said it would be "carefully designed" so it isn't small tech start-ups that "shoulder the burden" of the tax.



In an effort to tackle plastic littering and help improve the quality of Britain's oceans, Mr Hammond announced a new tax on plastic.



The tax will apply to the manufacturing and importing of plastic packaging which contains less than 30 per cent recycled plastic.

The chancellor also allocated £10 million to deal with abandoned waste sites.


Counter-terrorism & defence

A total of £160 million has been announced for counter-terrorism police funding for 2019/10.

The chancellor said he hopes the move will "protect CT police numbers" and that further funding would be "considered" at the Spending Review.



A further £1 billion of funding has been allocated to the Ministry of Defence to boost the UK's cyber capabilities, anti-submarine warfare capacity and to maintain the Dreadnought programme.

Mr Hammond, who was formerly defence secretary, said the additional funding for the Ministry of Defence would allow us to "sleep easy in our beds".


National Living Wage

The National Living Wage will rise from £7.83 to £8.21 in April; a 4.9 per cent increase.

Mr Hammond said this would result in a £690 annual pay increase for a full-time worker.


Universal Credit

Mr Hammond promised an extra £1.7 billion for the implementation of Universal Credit.

He announced that work allowances in Universal Credit will increase by £1,000 per annum, claiming the move would benefit "2.4 million working-families-with-children, 2.4 million working-families-with-children, and people with disabilities by £630 per year".

He added: "Universal Credit is here to stay, and we are putting in the funding it needs to make it a success."


High streets

The government will put £675 into a high streets fund to help councils reinvent their high streets and explore turning disused commercial areas into residential properties.

Mr Hammond added that for the next two years, retailers with a rateable value of £51,000 or less will have their business rates cut by a third.