TT253: Budget Summary Spring 2017
The 8th of March saw Philip Hammond deliver the first of two budgets scheduled for 2017. At a mere 69 pages, the Spring Budget was comparatively short, however the Chancellor still managed to throw in a few surprises. Not least was the tax hikes in the form of an increase to Class 4 National Insurance and a reduction in the tax free dividend allowance, which came despite the Government’s pledge not to raise VAT, Income Tax or National Insurance. Another area notable by its absence was the glaring lack of policies designed to address the issues arising from Brexit. This aside, some positive statistics were announced in relation to the health of the economy, along with modest spending increases in relation to health, social care and education. A number of measures were also introduced to help small businesses deal with the changes to business rates.
Some of the key tax announcements were as follows:
- The main rate of Class 4 National Insurance payable by the self-employed will increase from 9% to 10% in April 2018, and again to 11% in April 2019.
- The tax free dividend allowance of £5,000 will reduce to £2,000 from April 2018.
- The implementation date for ‘Making Tax Digital’ will be deferred until April 2019 for landlords and unincorporated businesses with turnover below £85,000.
- It was confirmed that the personal allowance will increase to £11,500 from April 2017.
- For the majority of the UK, the higher rate tax threshold will increase by £2,000 to £45,000 in April 2017.
- For Scottish taxpayers, the higher rate threshold will remain at £43,000 in relation to non-savings and non-dividend income – the £45,000 threshold only applying to savings and dividend income.
- Pension transfers to qualifying recognised overseas pension schemes (QPROS) will be subject to a 25% tax charge unless a number of conditions are met where there is a genuine need to transfer the pension fund.
Further details can be found in our budget summary.Talk to Barnes Roffe today