Below are some of the key announcements in the Budget:
- Self-employed workers will see their Class 4 national insurance contributions (NICs) increase by 1% to 10% in April 2018, with a further percentage point rise to 11% from April 2019. The government had previously announced that Class 2 NICs will be abolished from April 2018.
- The tax-free dividend allowance will be reduced from £5,000 to £2,000 from April 2018.
- The individual savings account (ISA) allowance will rise to £20,000 in April 2017 as previously announced.
- The new NS&I investment bond available for 12 months from April 2017 will pay 2.2% over a three-year term on deposits of up to £3,000.
- As already announced, the personal allowance will rise to £11,500 in April 2017 and to £12,500 by 2020 and the higher rate income threshold will rise to £45,000. Special rules will apply in Scotland.
- The Chancellor confirmed that corporation tax will be cut to a rate of 19% from April 2017 and that the rate will be further reduced to 17% in 2020.Businesses losing their Small Business Rate Relief will benefit from a cap on increases in their rates bill.
- The government has announced it will consult on proposals to redesign rent-a-room relief, to ensure it is better targeted to support longer-term lettings.
- Unincorporated businesses and landlords with a turnover below the VAT threshold will have an extra year, until April 2019, before they have to implement ‘Making Tax Digital’.
- The government will introduce a 25% charge on transfers to qualifying recognised overseas pension schemes or QROPS. There will exemptions from the charge for people with a genuine need to transfer their pensions overseas.
Views from Rutherford Wilkinson shared with the media:
Moneywise, Budget 2017: the Moneywise verdict
The Chancellor announced an additional £2 billion will be spent on social care in England over the next three years and a green paper into specific measures to help solve the funding crisis will be launched later in the year.
Money Observer, £2 billion for social care
Cut in the dividends allowance from £5,000 to £2,000
Investors Chronicle, Spring Budget 2017: Dividend allowance slashed to £2000
Portfolio Adviser, Budget 2017: UK cuts tax-free dividend allowance to £2k
FT Adviser, Chancellor’s dividend allowance cut under fire
No changes to Lifetime Allowance
Financial Planning Today, Budget – reaction and key changes
No changes to Gifting rules
IFA Magazine, Spring Budget 2017: Reaction from Rutherford Wilkinson