Are we headed for ‘A Brighter Future’?

Chancellor Philip Hammond described his first and last Spring Budget as one that “takes forward our plan to prepare Britain for a brighter future”.

The economic forecasts outlined by the Office for Budget Responsibility (OBR) were broadly in line with those from the Autumn Statement in November 2016.

Inflation is forecast at 2.4% in 2017, 2.3% next year and 2% in 2019.

Growth is predicted to be 2% in 2017 (up from 1.4% forecast at Autumn Statement 2016) and 1.6% in 2018.

Borrowing in 2016/17 is forecast to be £51.7 billion (£16.4 billion lower than in the autumn) and public sector net borrowing is predicted to fall from 3.8% of GDP in 2016 to 2.6% this year.

Spring Budget 2017 was light on new measures with very few new announcements that will come into effect for the 2017/18 tax year.

The Chancellor confirmed that from April 2017:

  • the national living wage will be £7.50 an hour
  • personal allowance will increase to £11,500 and the higher rate threshold to £45,000 (£43,000 in Scotland)
  • a new NS&I bond paying 2.2% on deposits up to £3,000.

The following report summarises the announcements made by Chancellor Philip Hammond during Spring Budget 2017 on 8 March 2017.

At a glance

Making tax digital

  • Quarterly reporting delayed by one year for businesses with turnover below VAT threshold

T-levels

  • New qualification for technical education

R&D tax credits

  • Measures to lower administrative burden to be introduced

Business rates

  • Cap in bills for firms coming off small business rate relief in England

Self-employed NICs

  • Class 4 NICs to rise to 10% in April 2018 and 11% in April 2019

Dividend allowance

  • Tax-free dividend allowance to reduce to £2,000 from April 2018

Business Rates: Pubs

  • £1,000 business rate discount in England

Tax avoidance

  • Measures against converting capital losses to trading losses

Soft drinks levy

  • 18p rate for main band and 24p for higher band
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