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Budget 2017 Summary

Budget Update 2017

Here’s a summary of the main points from the 2017 Budget Statement

Tax

The increase in Class 4 NICs for the self employed grabbed the headlines; rising from 9%-10% in 2018 and to 11% in 2019. The increases apply to earnings between £8,060 and £43,000. Class 4 earnings above £43,000 will continue to be taxed at 2%.

Meanwhile the total dividend income that company directors and shareholders can receive tax-free will fall from £5,000 to £2,000 from April 2018. About half of the people affected would be directors of private companies, the remainder mostly being investors holding shares worth £50,000 or more outside ISA wrappers.

Personal tax-free allowances will rise as planned to £11,500 this year and to £12,500 by 2020. The higher rate income tax threshold will rise from £40,000 to £45,000 and will be followed by a further increase to £50,000 by 2020.

Tax Avoidance

Accountants, bankers and lawyers will be fined up to 100% of the tax their client avoided if an HMRC investigation finds the scheme they helped create falls foul of the rules. Businesses will no longer be able to convert capital losses into trading losses.

Business Rates

A £435m was promised for business rate relief, including a £300m hardship fund for the worst hit firms. Rate rises for businesses losing existing relief will be capped at £50 a month for five years. Pubs with a rateable value of less than £100,000 will receive a discount of £1,000 in 2017

Other announcements included £270m for disruptive technologies such as biotech, robotic systems and driverless cars; £200m for local projects to leverage private sector investment in full-fibre broadband networks; and £16m for a new 5G mobile technology hub.  

R&D Reliefs

Philip Hammond says he has accepted industry calls for a reduction in burdens affecting R&D tax reliefs, and will be reviewing the regime to lessen this.

Tax reliefs for Elderly Care

The government is considering introducing tax reliefs to encourage people to put money aside for their care in old age.

Pensions

Qrop Transfers

A 25% charge on qualified recognised overseas schemes (Qrops) for those looking to move their pension overseas is set to be introduced.  

Personal Finance

The Budget confirmed a new NS&I bond announced in the autumn statement will be available from April and pay 2.2% on deposits up to £3,000.

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