Budget 2017 summary: Key points at-a-glance
In case you missed it ...
Philip Hammond has delivered his first Budget as chancellor. These are the key points of what he has said.
Personal taxation
The main rate of Class 4 National Insurance contributions for the self-employed to increase from 9% to 10% in April 2018 and 11% in April 2019. Note: This item has now been reversed by the government since the budget announcement.
The increases, applying to earnings between £8,060 and £43,000, will raise £145m a year by 2021-22 at an average cost of 60p a week to those affected. All Class 4 earnings above £43,000 will continue to be taxed at 2% while those below £8,060 will pay nothing.
Class 2 National Insurance, a separate flat rate contribution paid by self-employed workers making a profit of more than £5,965 a year, is to be scrapped as planned in April 2018
Taken together, millions of self-employed workers could pay an average of £240 a year more but ministers say those earning £16,250 or less will pay less
No changes to National Insurance paid by the employed and employers or to income tax or VAT
Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020
Business
£435m for firms affected by increases in business rates, including £300m hardship fund for worst hit
Pubs with rateable value of less than £100,000 to get a one-year £1,000 discount on rates they would have paid
Rate rises for businesses losing existing relief will be capped at £50 a month
A £820m tax avoidance clampdown, including action to stop businesses converting capital losses into trading losses and introduction of UK VAT on roaming telecoms services outside the EU
Privately-owned SMEs to get extra year to prepare for tax digitisation and quarterly reporting
Review of taxation of North Sea oil producers
The state of the economy
UK second-fastest growing economy in the G7 in 2016
Growth forecast for 2017 upgraded from 1.4% to 2%
But GDP downgraded to 1.6%, 1.7%, 1.9% in subsequent years, then 2% in 2021-22
Annual rate of inflation forecast to rise from 2.3% to 2.4% in 2017-18 before falling to 2.3% and 2.0% in subsequent years
A further 650,000 people expected to be in employment by 2021
Public borrowing/deficit/spending
Annual borrowing £51.7bn in 2016-17, £16.4bn lower than forecast
Borrowing forecast to total £58.3bn in 2017-18, £40.6bn in 2018-19, £21.4bn in 2019-20 and £20.6bn in 2020-21
Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.6% this year, then 2.9%, 1.9%, 1% and 0.9% in subsequent years, reaching 0.7% in 2021-22.
But borrowing still predicted to be £100bn higher by 2020 than forecast in March 2016
Debt rose to 86.6% this year, but will fall to 79.8% in 2021-22
Alcohol, tobacco, gambling and fuel
No increases in alcohol or tobacco duties on top of those previously announced
A new minimum excise duty on cigarettes based on a packet price of £7.35
Tobacco will rise by 2% above Retail Price Index (RPI) inflation, with a packet of 20 cigarettes costing 35p more
Duty on beer, cider, wine and spirits will increase in line with RPI inflation
This will equate to 2p on a pint of beer, 1p on a pint of cider, 36p on a bottle of whisky and 32p on a bottle of gin
Fuel duty frozen for a further year
Vehicle excise duty rates for hauliers and the HGV Road User Levy frozen for another year
Pensions and savings
Reduction in tax-free allowance on share dividends from £5,000 to £2,000
The measure, affecting small business owners and investors, will come into force in April 2018, raising £2.63bn by 2021-2022
Dividend income paid on shares held in a stocks and shares ISA will remain tax free.
Measures to tackle abuse of overseas pension schemes
Education (England only)
£300m to support 1,000 new PhD places and fellowships in STEM (science, technology, engineering and maths) subjects
Free school transport extended to all children on free school meals who attend a selective school
Upgrade fund of £216m for existing schools
£320m of funding for 110 new free schools and grammar schools
New T-Levels to be introduced to give parity of esteem for technical education
Number of hours of training for technical students aged 16 to 19 increased by more than 50%, including a high-quality, three-month work placement
Health and social care
£100m to place more GPs in accident and emergency departments for next winter
Additional £325m to allow the first NHS Sustainability and Transformation Plans to proceed
An extra £2bn for social care over next three years, with £1bn available in the next year
Long-term funding options to be considered but so-called "death tax" on estates ruled out
Most sugary soft drinks to be taxed at 24p per litre as part of plans to reduce childhood obesity
Nations/housing/infrastructure/transport/regions/science
£350m in funding for Scottish Government, £200m for Welsh Government and £120m for Northern Ireland Executive
Transport spending of £90m for the north of England and £23m for the Midlands to address pinch points on roads
£690 million competition fund for English councils to tackle urban congestion.
£270m for new technologies such as robots and driverless vehicles
£16m for 5G mobile technology and £200m for local broadband networks
Women
New funding totalling £20m to support the campaign against violence against women and girls
A further £5m committed to project to celebrate the centenary of women first getting the vote, and to educate young people about its significance
Funding of £5m to support people returning to work after a career break
Contact us:
We can help you the most tax efficient choice for your set of circumstances. We offer bespoke solutions so why not give Ping a ring on 01256 769792 to speak to an adviser or email us at info@pingca.co.uk.
