Budget 2017

Posted on March 9, 2017

Chancellor Philip Hammond delivered the last Spring Budget to Parliament yesterday. He stated that this Budget is working towards a “stronger, fairer and better Britain” and to prepare Britain for a “global future”.

The key announcements were as follows:-

  • An increase in the personal allowance for income tax to £11,500 for 2017/18, increasing to £12,500 by 2020
  • Higher rate threshold for income tax to rise from £45,000 in 2017/18 to £50,000 by 2020
  • From 6 April 2018, Class 4 National Insurance Contributions (NIC) will increase from 9% to 10% and from 6 April 2019 will increase again to 11%
  • From April 2018, Class 2 NIC will be abolished
  • From 6 April 2018, the tax-free dividend allowance will be reduced from £5,000 to £2,000
  • From 6 April 2017, the annual exempt amount for capital gains tax for individuals increases from £11,100 to £11,300. Capital gains tax rates are unchanged from the new announcements in the Budget
  • Corporation tax rates will be reduced from 20% to 19% for all companies from 1 April 2017 and then to 17% from 1 April 2020
  • Making Tax Digital is delayed until April 2019 for businesses with turnover below the VAT threshold
  • From 1 April 2017, the VAT registration threshold will increase to £85,000
  • From April 2017, the National Minimum Wage and the National Living Wage will increase
  • From 6 April 2017, the annual savings limit for ISAs will increase from £15,240 to £20,000 and a new Lifetime ISA for adults under 40 will be introduced
  • Following the business rates revaluation to take effect from April 2017, support will be given to small businesses losing Small Business Rate Relief (SBRR) to ensure no small business coming out of SBRR is paying £600 more in business rates than they paid in 2016/17
  • From 6 April 2017, a new ‘residence nil-rate band’ of £100,000 will be introduced relating to inheritance tax on a ‘family home’ which will increase to £175,000 from 6 April 2020
  • From 6 April 2017, the money purchase annual allowance will reduce from £10,000 to £4,000
  • From 9 March 2017, a new 25% charge is introduced on transfers to Qualifying recognised overseas pension schemes
  • From 1 June 2017, the standard rate of Insurance Premium Tax will increase from 10% to 12%

Download your full copy of the Budget Booklet 2017. If you would like to discuss any of the issues raised by the Budget, please do contact us.

 

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