Both petrol and diesel duty continue to be frozen, cancelling planned rise that was scheduled for April.
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 fuel duty escalator for Liquefied Petroleum Gas (LPG) will end. The LPG rate will be frozen in 2018-19, alongside the main rate of fuel duty.
Following the new taxes on diesel cars, the Government will provide £220 million for a new Clean Air Fund to support the National Air Quality Plan published in July. This money will be provided to local authorities across England to address pollution problems and assist both individuals and businesses to adapt to new air quality standards.
The Government is launching a consultation alongside Budget on options that could be supported by this fund.
Taxation on employee business expense
The Government has confirmed it has no plans for a fundamental reform to the tax relief for employee expenses. However, the Government has decided to introduce changes in the following areas:
- Self-funded training – The government will consult in 2018 on extending the scope of the tax relief currently available to employees and the self-employed for work-related training costs, to support lifelong learning and retraining.
- Guidance and claims process for employee expenses – HMRC will work with external stakeholders to improve the guidance on employee expenses, particularly on travel and subsistence and the process for claiming tax relief on non-reimbursed employment expenses.
Living Wage and the National Minimum Wage (NMW)
The National Living wage will increase by 4.4% from £7.50 to £7.83 from April 2018, which is estimated to benefit over 2 million workers.
The Government will also accept and implement a series of recommendations by the Low Pay Commission. This means that from April 2018, the Living Wage will increase for the following age rates:
➢ 4.7% rise for 21 to 24-year olds, from £7.05 to £7.38 per hour;
➢ 5.4% rise for 18 to 20-year olds, from £5.60 to £5.90 per hour;
➢ 3.7% rise for 16 to 17-year olds, from £4.05 to £4.20 per hour; and
➢ 5.7% rise for apprentices, from £3.50 to £3.70 per hour.