Spring Budget 2017 – Initital Key Points

• Borrowing forecasts down this year and next from £59bn in 2017/18 to £58.3bn and from £46.5bn in 2018/19 to £40.8bn.
• Growth forecast for 2017 up from 1.4% to 2% but down from 1.7% to 1.6% in 2018.
• Reduction in corporation tax confirmed for April 2017 down to 19% with a further reduction down to 17% from April 2020.
• There is to be a consultation on business rates before the next scheduled revaluation. In the meantime 3 measures were announced to provide assistance to smaller businesses:
  • Businesses coming out of the smaller rate relief will benefit from an additional cap – rates in the first year will not increase by more than £50 per month
  • Local pubs with a rateable value below £100,000 will benefits from a £1,000 discount
  • Local Authorities will be granted £300million to provide discretionary relief in cases of hardship.
• The Chancellor continues to focus on collecting taxes that are due and further measures will be introduced to tackle avoidance.
• Class 4 National Insurance Contributions (NICs) for the self employed are to rise from 9% to 10% from April 2018 to coincide with the abolition of Class 2 NICs. Class 4 to rise again in April 2019 to 11%.
• The Dividend Tax Allowance will be reduced from £5,000 per annum to £2,000 per annum from April 2018.
• Increase in ISA allowance to £20,000 from April 2017 is confirmed.
• Personal allowance to increase to £11,500 from April 2017 and higher rate tax threshold to £45,000.
• National living wage to increase to £7.50 in April.
• The new NS&I bond announced in the Autumn will be available from April and will pay 2.2% gross on deposits up to £3,000.
• Free childcare entitlement for working parents with children aged 3 and 4 to increase to 30 hours per week.
• Further investment in innovation, infrastructure and education, including 110 new free schools.
• £2billion to be allocated to social care, with £1billion being made available in 2017/18.

If you would like to discuss how any of the Budget announcements may affect your financial plans, please do contact us.