The Last Spring Budget 2017
The Chancellor has just sat down from delivering the 2017 Budget speech. We will provide more details on the changes announced as they emerge however the main tax and savings matters referred to in the speech were as follows:
Business Tax
- Making Tax Digital – businesses with turnover below the vat threshold will be able to delay quarterly reporting by one year
- The planned reduction in corporation tax to 19% from April 2017 and 17% from April 2020 is to go ahead
- Measures are to be introduced to reduce the administrative burden around R&D tax credits
- 3 measures will be introduced to help small businesses affected by the recent business rates revaluation:
- Businesses coming out of small rate relief will have the increased cost capped at £50 per month
- There will be a £1,000 discount on business rates for all pubs with a rateable value of below £100,000
- A £300m fund will be made available for local authorities to provide discretionary relief
- The national living wage will increase to £7.50 with effect from April 2017 as planned
- A “Midlands Engine Strategy” will be published tomorrow
Investments & ISA’s
- A new NS&I Bond will be introduced giving a rate of 2.2% on deposits up to £3,000
- The planned increase in ISA allowance to £20,000, with effect from April 2017, is to go ahead
Tax Avoidance
- There will be further targeting around converting capital losses to trade losses and around overseas pension schemes
- Penalties are to be introduced for professionals enabling tax schemes which are later defeated by H M Revenue & Customs
Income Tax and NIC
- The tax-free dividend allowance of £5,000 per person is to be reduced to £2,000 with effect from April 2018
- Class 4 NIC will be increased by 1% to 10%, with effect from April 2018, and by a further 1% in April 2019 in order to reduce the gap between the employed and self-employed thereby improving the fairness of the tax system
- The planned abolition of class 2 NIC will go ahead in April 2018
- The planned increases in the personal allowance to £11,500, and the higher rate threshold to £45,000, will go ahead in April 2017
Duties and Miscellaneous
- Alcohol and tobacco duty increases will remain as previously announced
- Vehicle excise duty for hauliers will be frozen for a year
- The new soft drinks levy will go ahead as previously announced
- Free childcare for working families with young children is to be doubled to 30hrs a week
- Tax-free childcare, worth up to £2,000 per child, for children under 12 is to go ahead in April 2017
This is very much an overview of the speech and more details will be available in the press releases on which we will report in due course. If you do require any further information at this stage please contact our Tax Director Jenny Marks.
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