The live highlights as the chancellor Philip Hammond makes his first and last Spring Budget, keep refreshing to read more! MTD: postponed for small business by one year, NICs to increase for the self employed and dividend allowance decreases to £2k in 2018.
The UK has robust growth and record employment and this budget is to prepare strong and stable foundation ahead of Brexit.
- Britain's economic growth in 2016 second only to Germany.
- Government debt, poor qualified school leavers and just about managing families still major issues.
- OBR forcasts growth of 2% this year but will drop to 1.6% before rising back to 2% in 2020.
- OBR: net public borrowing set to fall from 3.8% to 2.6%, then to rise ahead of Brexit before reducing again.
- Britain's total debt is currently 1.7 trillion pounds: this budget is self-funding.
Corporation tax
- Rate cuts as previously announced: no further reductions.
- R & D regime: measures to reduce tax burdens.
- New high tech grants for disruptive technologies, 5G hub and full fibre broadband.
Making Tax Digital
- Postponed by one year (i.e. to 2019) for small business with turnover below the VAT threshold.
Business Rates
- Will look at reform of future revaluation metrics
- Any business coming out of small business rate relief: increases capped to £50 per month.
- Pubs: £1,000 discount if rateable value is lower than £100,000
- Local Authorities given a discretionary fund to assist businesses adversely affected.
The Self employed
- National Insurance rates to increase.
- Class 4 NICs to increase to 10% in 2018 and then 11% in 2019. Class 2
- Those with income of less than £16,250 will see a decrease in their NICs bills.
Personal service companies (PSCs)
- Sounds like some measures are being considered but uncertain from speech if this is simply limited to changes to the dividend allowance.
Shareholders
- Tax-free dividend allowance reduced to £2,000 from 2018.
Personal allowance and basic rate bands
- Allowances to rise moderately (as previously announced the aim is to set the personal allowance to 12,000 by 2020).
Anti-avoidance
A series of measures including (but not limited to):
- To ensure income taxed as income and not capital.
- VAT on roaming charges
- Enhanced penalties for professional enablers of tax avoidance schemes
Non-tax highlights:
- Support for women's charities
- Powerful mayors for the cities
- Funding for midlands
- Competition for local authorities to devise their travel plans
- Investment in schools and also to create 110 more selective free schools
- A new qualification: the T level for apprentices, with maintance loans for higher training.
- DFE pilots in retraining.
- £2b new funding for social care over two years.
Not the budget: good news for personal service companies (PSCs) working in the public sector: HMRC concedes that its guidance for corporation tax relief did not make any sense. PSCs may now take the net direct deemed payment as turnover.
