Posted on March 9, 2017
On 8 March 2017, the Chancellor, Philip Hammond, delivered his first Spring Budget. His plan is to ‘prepare Britain for a brighter future’ and that ‘we are building the foundations of a stronger, fairer, more global Britain’.
National Insurance contributions will increase for the self-employed
Class 4 National Insurance contributions will increase from 9% to 10% in April 2018 and to 11% in April 2019 for the self-employed, compared to 12% paid by employees. The Chancellor announced those earning less than £16,250 would be better off. There were no changes to National Insurance paid by the employed and employers or to income tax or VAT.
- The Personal tax-free allowance (currently £11,000 at the time of writing) will rise to £11,500 from 6 April 2017 and to £12,500 by 2020. The higher rate tax threshold will increase from £43,000 to £45,000 from 6 April 2017
- The UK has the second-fastest growing economy in the G7 in 2016
The Growth forecast for 2017 has been upgraded to 2% from the previous forecast of 1.4%.
- The annual rate of inflation forecast is to rise from 2.3% to 2.4% in 2017/18 before falling to 2.3% and 2.0% in subsequent years
- Tax-free dividend allowance reduced from £5,000 to £2,000.
From April 2018, the total amount of dividends that company directors and shareholders can receive tax-free will be slashed to “address unfairness”. This will not affect investments held within a stocks & shares ISA.
- Tax-free ISA allowance to increase as planned to £20,000 from 6 April 2017 per individual
- The Lifetime ISA will also be rolled out from 6 April 2017
- £320m of funding will be provided for 110 new free schools and grammar schools
- £100m of funding will be provided to place more GPs in accident and emergency departments for next winter