Budget 2017 Breakdown: Taxes, Savings and Pensions

 The House of Commons, London. 

Chancellor Philip Hammond delivered his first Budget in the House of Commons yesterday, announcing some significant amendments to taxes, savings and pensions.

This will be the Chancellor’s last Spring Budget after he recently announced that the main Budget would be moved to Autumn in the near future. Here’s a breakdown of some of the key points and how you could be affected by the changes.

PERSONAL TAXES

  • The main rate of Class 4 National Insurance contributions for the self-employed to increase from 9% to 10% in April 2018 and 11% in April 2019

  • Class 2 National Insurance is to be scrapped as planned in April 2018

  • Taken together, millions of self-employed workers could pay an average of £240 a year more but ministers say those earning £16,250 or less will pay less

  • There were no changes to National Insurance paid by the employed and employers or to income tax or VAT

  • Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020

BUSINESS TAXES

  • £435m has been allocated for firms affected by increases in business rates, including £300m hardship fund for worst hit

  • Pubs with rateable value of less than £100,000 to get a one-year £1,000 discount on rates they would have paid

  • Rate rises for businesses losing existing relief will be capped at £50 a month

  • A £820m tax avoidance clampdown, including action to stop businesses converting capital losses into trading losses and introduction of UK VAT on roaming telecoms services outside the EU

  • Privately-owned SMEs to get extra year to prepare for tax digitisation and quarterly reporting

  • Review of taxation of North Sea oil producers

PENSIONS & SAVINGS

  • Reduction in tax-free allowance on share dividends from £5,000 to £2,000

  • The measure, affecting small business owners and investors, will come into force in April 2018, raising £2.63bn by 2021-2022

  • Dividend income paid on shares held in a stocks and shares ISA will remain tax free.

  • Measures to tackle abuse of overseas pension schemes

 

Visit the links below for more on this year’s Budget:

GOV.UK

BBC News

The Guardian

The Independent