Philip Hammond presented the 2017 Spring Budget on Wednesday 8 March 2017.
This blog focuses on the direct and indirect tax measures announced, as well as the announcements made previously which affect the 2017-18 tax year and beyond.
It concentrates on the issues likely to affect you, your family and your business.
If you have any questions please do not hesitate to contact me for advice.
Main Budget proposals
- National insurance rates for the self employed (Class 4) will increase from 9% to 10% from 6 April 2018 and then to 11% from 6 April 2019.
- There will be a consultation on extending ‘parental benefits’ to the self employed.
- The nil rate dividend allowance of £5,000 will be reduced to £2,000 from April 2018.
- The new NS&I bond announced previously will be available for 12 months from April 2017. It will be a three year bond with an interest rate of 2.2% for up to £3,000.
- There will be transitional reliefs for small business adversely affected by the Business Rates review and a £1,000 discount for pubs with a rateable value of less than £100,000.
- Making Tax Digital will be delayed until April 2019 for the self employed with turnover less than the VAT threshold.
Note: Personal allowances and tax thresholds for a year ahead (ie for 2018-19) have been announced in past Budgets. There were no such announcements in the Spring 2017 Budget since there will be another Budget in the Autumn. From then on, there will be an Autumn Budget with a Spring Statement.
A reminder of key changes announced previously
- The personal allowance for tax will increase to £11,500 from 5 April 2017.
- The higher rate tax threshold will be £45,000 for 2017-8.
- Class 2 National Insurance will be abolished from 6 April 2018.
- There will be a new ‘Lifetime ISA’ to help adults under the age of 40 save towards buying their first home or for their retirement.
- Capital gains tax rates will fall to 10% for basic rate tax payers and 20% for higher rate tax payers – but the old rates of 18 and 28% will continue to apply for the sale of residential property not qualifying as your personal private residence.
- Corporation tax rates will fall to 17% from 1 April 2020 (Current: 20%, 1 April 2017: 19%).
- There will be new £1,000 allowances for trading and property income from 5 April 2017.
- The changes to interest deduction rules for landlords start from April 2017, being phased in over a 4 year period. Relief for interest will be limited to basic rate tax.