2018 Budget - What the Aluminium Industry needs to know
2018 Budget – What the Aluminium Industry Needs to Know
Monday’s pre-Brexit Budget coverage has focused on initiatives like the £100 billion public spending package, tax cuts and the new digital services tax. Here we look beyond the headlines at what Philip Hammond’s announcements mean for the aluminium industry.
- Advanced technologies: £1.1 billion of extra funding will go to the Industrial Strategy Challenge Fund to support advance manufacturing-related technology adoption
- Apprenticeship levy: The Government will halve the co-investment rate for apprenticeship training from 10% to 5%. It will also provide £450 million for employers to transfer up to 25% of their fund to pay for training in their supply chains. These changes should make it easier to align apprenticeship schemes with business needs
- Building works: A new Structures and Buildings Allowance (SBA) more or less replaces the old Industrial Buildings Allowance. It will be available for new construction expenditure, although not for assets that qualify for Plant and Machinery Allowances
- Energy: A new Industrial Energy Transformation Fund will help energy-intensive industries reduce their consumption, although there’s not much detail on how this will work. The Budget also includes measures to provide post-Brexit stability for businesses affected by the EU ETS, as well as a rebalancing of the main rates of climate change levy so that gas and electricity rates are closer together
- Defence: £1 billion in defence spending includes an allocation for building the UK’s nuclear submarine capabilities, which offers future opportunities for aluminium component manufacturers
- Infrastructure: The Chancellor pledged £30 billion to improve roads, which should help with transport and logistics, although it’s worth noting that the commitment falls short of what the AA and other organisations have said is required
- Plant and machinery investment: From 1 January 2019 until 1 January 2021, the Annual Investment Allowance (AIA) for plant and machinery will increase from £200,000 to £1 million. This could have a big impact on SMEs looking to make major purchases. However, the first year allowance and tax credit for products on the energy technology list and water technology list are being withdrawn from April 2020, and the rate of special writing down allowance will reduce from 8% to 6% from 1 April 2019
- Recycling: There will be a tax on the manufacture and import of plastic packaging containing less than 30% recycled materials. This could help boost the market for non-plastic packaging
If you have questions about how the Budget affects your business, get in touch.