Headlines from today's Budget No Images? Click here Headlines from today's Spring BudgetOn 8 March 2017 Philip Hammond delivered his 1st budget speech as Chancellor, and his 2nd major economic speech. The focus being on “building an economy that works for everyone”. The main announcements were an increase to the main rate of Class 4 National Insurance Contributions and a reduction in the Dividend Allowance, details of which are below. Class 4 National Insurance ContributionsThe main rate of Class 4 NICs will increase to 10% from April 2018 and to 11% from April 2019. The increase coincides with the abolition of Class 2 NICs from April 2018, which had already been announced. As a result of the above changes, a taxpayer with profits of £45,000 will pay an additional £591.12 in 2019/20. Philip Hammond ahead of the Spring Budget today A summary of the other main measures (some of which had already been announced) include:
Income tax allowancesAs previously announced, the personal allowance will increase to £11,500 from 6 April 2017, and the higher rate tax threshold will increase to £45,000. These will rise to £12,500 and £50,000 respectively by 2020. ISA allowancesAs previously announced, the main ISA allowance will increase to £20,000 from April 2017. In addition, and also from April 2017, those under the age of 40 will be able to open a new Lifetime ISA to save either for a first home or for retirement. A maximum of £4,000 can be saved each year, and for every £4 saved, the Government will add a bonus of £1 until their 50th birthday. New NS&I BondThose aged 16 and over will be able to invest a minimum of £100 and a maximum of £3,000 from April 2017 in the new bond, which will offer an interest rate of 2.2%. The bonds will be available for 12 months, and will be for a term of 3 years. Tax-Free ChildcareFrom 2017, it is possible to open an online account through the Government website to assist with the cost of childcare with a registered provider. The scheme will be rolled out gradually to families, with parents of the youngest children able to apply to use the new scheme first. For working parents (where both parents work, earning a minimum of £115 per week and a maximum of £100,000 each per annum, and including those who are self-employed), for every 80p transferred to the dedicated online account the Government will top this up with 20p. This will allow working parents to claim up to £2,000 per child towards the cost of childcare per year. Making Tax DigitalThe government have delayed the introduction of quarterly electronic reporting by a year, until April 2019, for unincorporated businesses and landlords with turnover below the VAT threshold (currently £83,000, increasing to £85,000 with effect from 1 April 2017). Larger businesses will be required to report on this basis at a later date, yet to be announced. For more information on Making Tax Digital please follow the below link to view our recent webinar. Further Provisions relating to Small Business Rate ReliefThe revaluation of properties as at April 2017 will go ahead as planned. However, from 1 April 2017 those businesses losing Small Business Rate Relief will have the increase in their bills capped at £50 per month. In addition, there will be a £1,000 discount for all pubs with a rateable value of up to £100,000 (for one year only at this stage), and a discretionary fund of £300 million to enable local authorities to provide relief to small businesses who are particularly hard-hit in their local area. Further reductions to the rate of Corporation TaxIt has been confirmed that the planned reductions in the rate of UK corporation tax rate will go ahead. The rates will be 19% from 1 April 2017 and 17% from 1 April 2020. Vehicle Tax and FuelThe HGV VED and Road User Levy will be frozen from 1 April 2017, and the government will call for evidence on updating the existing Road User Levy. The government will also seek evidence on the use of red diesel in order to improve understanding of eligible industries and current use, with evidence in relation to the use of red diesel in urban areas particularly sought. Alcohol dutyDuty on beer, cider, wine and spirits will increase in line with inflation with effect from 13 March 2017, while a new duty band for still cider (below 7.5% abv) and still wine (between 5.5% and 8.5% abv) will be consulted on. And finally…..The Chancellor has announced the introduction of UK VAT on roaming telecoms services used outside the EU for the first time, meaning that holiday makers and business travellers will see a 20% hike in call charges. Your Authors
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