The Spring Budget 2017: Full Summary
The Chancellor Philip Hammond delivered his first (and the last) Spring Budget earlier this afternoon. A slimmed down pre-Brexit Budget perhaps, with further announcements to be made in the Autumn Budget later this year?
Announcing an increase in the growth forecast for 2017 to 2%, the Chancellor promised £2bn of extra spending for social care services, funding for 110 new free schools and assistance with rising business rates.
Key tax announcements include the very welcome delay to the introduction of digital tax accounts and quarterly reporting for small (self-employed) businesses until 2019: a sensible response to very real concerns over the ambitious timetable for fundamental changes to our tax system.
Despite a Conservative manifesto pledge not to increase National Insurance, the main rate of Class 4 contributions for the self-employed will increase to 10% by 2018 and to 11% by 2019, a measure predicted to increase Treasury funds by £2bn in its first four years. Continuing his theme of levelling the playing field for the employed and self-employed, Mr Hammond also announced a reduction in the tax free dividend allowance from £5,000 to £2,000 from April 2018.
Today’s Budget follows a period of active consultation by HM Revenue & Customs on previously announced measures. We expect confirmation of the outcome or further consultation on a number of issues with the publication of the Finance Bill on 20 March. These issues include salary sacrifice, employer provided living accommodation, the reform of domicile rules and Inheritance Tax, and the tax deductibility of corporate interest expense. Further details will follow in due course.
Partner, Head of Tax
Tel: +44 20 7969 5610