If you missed it, here’s a quick run-down of the Budget 2017 and the main changes announced.
The economy (OBR forecast)
Growth: Upgraded forecast to growth from 1.4% to 2% for next year, followed by:
– 1.6% in 2018
– 1.7% in 2019
– 1.9% in 2020
– 2% in 2021
Inflation: 2.4% this year, 2.3% next year, 2% in 2019
Borrowing: OBR has revised down short-term forecast for public sector net borrowing
– 2016-17: £16.4bn lower than forecast in autumn at £51.7bn
– Borrowing would fall from 3.8% last year to 2.6% this year –
Debt: Overall debt to GDP is 86.6% in 2016-17 before rising to 88.8% in 2017-18 then 88.5% in 2018-19
Pledge to make Britain to be the best place to start a business
Corporation tax will fall to 19% this year and 17% in 2020 as planned
R&D tax credit regime will see a reduction in administrative burdens
– Introduction of quarterly reporting delayed by one year for small businesses, at a cost of £280m.
Cannot be abolished but the revaluation process needs reform – a preferred approach will be set out “in due course” and will consult before next revaluation is due
Need to look at rates for digital businesses which don’t use bricks and mortar
Additional cap for businesses coming out of small business rate relief – bills won’t increase more than £50 a month and a further cap will continue
£1,000 discount on business rate bills for all pubs with ratable value less than £100,000 – covering 90% of all pubs
Local authorities to get £300m to deliver discretionary relief for individual hard cases
Further plans to stop businesses converting capital losses into trading losses, tackle abuse of foreign pension schemes, introduce UK VAT on roaming telecoms services outside the EU
From July, tough new financial penalty for professionals who enable a tax avoidance arrangement that is later defeated by HMRC
New measures will raise £820m
Self-employed and businesses
Always encourage entrepreneurs and innovators who are lifeblood of our economy
People should have choice in how they work. But choices should not be driven by differences in tax stream
Differences in NICs between employment and self-employed were due to differences in entitlements for pensions and parental benefits. Now this cannot be justified.
Consultation in the summer over options to address disparities in this area.
The lower NI paid by self-employed will cost £5bn to tax system
Abolition of Class 2 NICs will remain but the main rate of Class 4 NICS will increase by 1% to 10% in April 2018 – with a further 1% increase in April 2019.
Self-employed earning less than £16,250 will still see reduction in total NICs bill
Dividend allowance: Reducing tax-free dividend allowance from £5,000 to £2,000 from April 2018
Duties and excise
Soft drinks levy is yielding less tax – meaning producers are reformulating sugar out of their drinks
£1bn funding for Department for Education from levy for school sports and healthy living programmes
VED rates for hauliers and HGV Road User Levy – frozen for another year
New minimum excise duty for cigarettes based on a pack price of £7.35 excise
No new changes to alcohol and tobacco
Personal tax and savings
This year, tax thresholds will rise to £11,500 low rate and £45,000 higher rate
– Committed to increasing the tax threshold to £12,500, and the higher rate threshold to £50,000 by the end of parliament.
The national living wage will rise to £7.50 in April
The new NS&I bond will be available from April and pay 2.2% on deposits up to £3,000
£4,760 increase in the annual ISA allowance £20,000 comes into effect in April
Universal credit taper rate reduced in April from 65% to 63%
Childcare and women:
£6bn spending on childcare by end of this parliament
Next month – Tax-Free Childcare policy introduced – allowing working families to receive up to £2,000 a year for childcare for children under 12
From September, working parents with 3-4 year olds will see doubling of free childcare to 30 hours
£20m additional funding for campaign tackling violence against women and girls
Tampon tax receipts to fund further £12m for women’s charities
£5m to promote ‘returnships’ to the public and private sector, helping people back into employment after a career break
£5m for centenary celebrations for 1918 Representation of the People Act – the decisive step in the political emancipation of women
£300m to support the brightest research talent, including support for 1,000 PhD students in STEM subjects.
£270m to keep UK at forefront of disruptive technologies such as biotech, robotic systems and driverless vehicles
£200m for projects to get private sector investment in full-fibre broadband networks
£16m for new 5G mobile technology hub
£90m for the north and £20m for the Midlands from a £220m fund that addresses pinch points in transport network
£690m competition for local authorities across England to tackle urban congestion – details to be announced
6 new city mayors
Further London devolution
Midlands Engine Strategy to be published tomorrow
Additional £350m for Scotland, £200m for Welsh Government, £120m for incoming NI executive
110 new free schools on top of current commitment of 500 – includes some specialist maths schools
Free school transport to be extended to all pupils on free school meals who attend a selective school
Extra £260m to improve school buildings
Maintenance loans to be made available for part-time undergraduate and doctoral loans in all subjects for the first time
Introduction of T Levels: a clearer system of qualifications with clear routes into work and good quality work placements – replacing 13,000 qualifications with 15 clear career focused routes
Increase by 50% in the number of hours training for 16-19-year-old technical students including high quality work placements for every student so that they are genuinely work ready
Offer maintenance loans for technical students – as university students have
DFe will invest up to £40m in pilots for different approaches to lifelong learning
£500m additional spending in 16-19 year olds
Health and social care
An extra £2bn grant funding for social care over next three years, with £1bn available in 2017-18 – on top of £7bn already committed
There will be a green paper on social care.
A £100m fund set up to fund triage projects in A&E departments, to relieve pressure on them next winter.
New capital programme for NHS sustainability and transformation plans (STPs) to be announced at Autumn Statement. £325m will be available to allow first selected plans to proceed before then.