Final Spring Budget sets the stage for ‘Britain’s global future’

Chancellor Philip Hammond presented his first – and last – Spring Budget to the House of Commons in belligerent form.

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Despite revealing upgraded forecasts from the Office for Budget Responsibility, the Chancellor announced that he would adhere to the government’s new fiscal plan, with the stated aim of preparing Britain for a ‘global future’. UK economic growth is now expected to reach 2% in 2017, before falling to 1.6% in 2018. Public sector net borrowing has been revised down to £51.7bn for 2016/17 and £58.3bn for 2017/18.

With Brexit approaching, the Chancellor announced a number of significant measures for UK businesses. These include a £435m package for firms in England affected by the business rates revaluation, with a cap on rate rises for those losing existing business rates relief and a £300m local authority 'hardship fund'.

As the government’s flagship Making Tax Digital initiative draws closer, there was also some good news for smaller firms, with the announcement that unincorporated businesses and landlords with turnover below the VAT registration threshold will have until 2019 to prepare for quarterly reporting.

However, a less welcome measure for the self-employed will see the main rate of Class 4 national insurance contributions (NICs) increasing to 10% in April 2018 and 11% in April 2019. Meanwhile, shareholders and directors of small private firms will see a significant reduction in the tax-free dividend allowance, which will fall from £5,000 to £2,000 in April 2018.

Keen to address the UK skills gap, the Chancellor announced the introduction of new ‘T-Levels’ for 16-19 year olds studying technical subjects from Autumn 2019, as well as funding for 110 new free schools.

The Chancellor also confirmed previously announced measures for individuals, including the introduction of the new Tax-Free Childcare scheme, a three-year NS&I Investment Bond and the new Lifetime ISA.

Alcohol duties will increase in line with inflation, while duty on tobacco will increase by 2% above RPI inflation. The main rate of the new Soft Drinks Industry Levy, or ‘sugar tax’, will be set at 18p per litre.

Under the Chancellor’s new timetable, the next Budget will be held in the autumn, followed by a Spring Statement in 2018.

Budget Highlights

  • £435m business rates support package
  • Class 4 NICs to rise to 10% in 2018
  • Tax-free dividend allowance to reduce to £2,000
  • Digital reporting delayed for some smaller businesses
  • New NS&I Investment Bond offering 2.2% on up to £3,000

 

To view more detailed analysis in our budget mini web site click here

Chancellor pledges post-Brexit economy “that works for everyone”.

Philip Hammond, the new Chancellor, presented his first major fiscal statement to the House of Commons on 23rd November 2016. For more information download the attachment click here.

It summarizes the main announcements that may affect you and your business.

For further advice, please contact me.

Sam Ullyott.

Chancellor George Osborne delivered his eighth Budget to the House of Commons, dubbing it a ‘Budget for the long term’ but warning that ‘the storm clouds are gathering again’.

Having proclaimed that the British economy is ‘fit for the future’ and that the Government remains on course to achieve a budget surplus of £10.4bn in 2019/20, the Chancellor warned that growing global economic gloom threatens the UK.

With low productivity growth and a weak global outlook continuing to present a ‘dangerous cocktail of risks’, the Chancellor revealed that the Office for Budget Responsibility (OBR) has significantly revised down its economic forecasts for the next five years, with UK economic growth forecast to be just 2% in 2016.

Official figures also revealed that the Chancellor has missed his target to reduce debt as a share of GDP. Borrowing forecasts have been revised upwards to £55.5bn for 2016/17, and the Chancellor announced the need for deeper spending cuts, with £3.5bn of additional savings to be made by 2019/20.

About this Report

Written immediately after the Chancellor of the Exchequer delivered his Budget Speech, is intended to provide an overview of the latest announcements and recent measures most likely to affect you or your business.

Throughout this guide we have included tips and ideas to assist you with effective tax and financial planning. However, it is important to understand that planning is an ongoing, year-round process.

We can help to ensure that your financial plans remain effective, even as your personal and business circumstances change. We will work alongside you to help you to achieve a rewarding and financially secure future.

Please note: while most taxation changes take effect from the start of the financial year, or tax year, some may not take effect until 2017, or later. Where relevant, details of these changes have been included in this Report.

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