Spring Budget 2017
The Chancellor Philip Hammond presented the last Spring Budget on Wednesday 8 March 2017
In his speech the Chancellor was keen to point out that he wanted the tax system to be fair, particularly in relation to the distinction between employed and self-employed individuals.
‘But a fair system will also ensure fairness between individuals, so that people doing similar work for similar wages and enjoying similar state benefits pay similar levels of tax .’
In the Budget speech the Chancellor announced that he has requested a report to be delivered in the summer on the wider implications of different employment practices. Also the Budget included changes to NICs and the Dividend Allowance.
In December and January the government issued a number of the clauses, in draft, of Finance Bill 2017 together with updates on consultations.
The Budget updates some of these previous announcements and also proposes further measures. Some of these changes apply from April 2017 and some take effect at a later date.
Our summary focuses on the issues likely to affect you, your family and your business. To help you decipher what was said we have included our own comments. If you have any questions please do not hesitate to contact us for advice.
Main Budget tax proposals
Our summary concentrates on the tax measures which include:
increases to the Class 4 National Insurance rates
a reduction in the Dividend Allowance
changes to the timing of Making Tax Digital for smaller businesses.
Previously announced measures include:
increases to the personal allowance and basic rate band (a decreased band for Scottish residents)
the introduction of the Apprenticeship Levy
changes to corporation tax loss relief
the introduction of an additional inheritance tax residence nil rate band
changes for non-UK domiciled individuals.
The Budget proposals may be subject to amendment in a Finance Act. You should contact us before taking any action as a result of the contents of this summary.
The personal allowance The personal allowance is currently £11,000. Legislation has already been enacted to increase the allowance to £11,500 for 2017/18. Comment A reminder that not everyone has the benefit of the full personal allowance. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000, which is £1…
Business rates Business rates have been devolved to Scotland, Northern Ireland and Wales. The business rates revaluation takes effect in England from April 2017 and will result in significant changes to the amount of rates that businesses will pay. The government announced £3.6 billion of transitional relief in November 2016. The Chancellor has now announced…
Off-payroll working in the public sector As previously announced, from 6 April 2017, new tax rules potentially affect individuals who provide their personal services via their own companies (PSCs) to an organisation which has been classified as a ‘public authority’. The effect of these rules, if they apply, will mean: the public authority (or an…
Capital gains tax (CGT) rates The current rates of CGT are 10%, to the extent that any income tax basic rate band is available, and 20% thereafter. Higher rates of 18% and 28% apply for certain gains; mainly chargeable gains on residential properties that do not qualify for private residence relief. The rate for disposals…
Making Tax Digital for Business (MTDfB) Extensive changes to how taxpayers record and report income to HMRC are being introduced under a project entitled Making Tax Digital for Business. The government has decided how the general principles of MTDfB will operate. Draft legislation has been issued on some aspects and more will be published in…