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  • Publish Date: Posted over 4 years ago
  • Author:by Laura Paterson

Budget 2017: Key points at a glance

Philip Hammond has delivered his first Budget as chancellor. With two Budgets in one year, there is potential to make a major impression on UK business and personal household finances. In the first, ‘Spreadsheet Phil’ said that he was supporting families while not spending recklessly.\r\n\r\nAlthough relatively low-key, there are other changes are already planned. This could add up to a significant financial impact – even before the next Budget in November.\r\n\r\nThese are the key points:\r\n\r\nBusiness\r\n\r\n\r\n £435m for firms affected by increases in business rates, including £300m hardship fund for worst hit\r\n Pubs with rateable value of less than £100,000 to get a one-year £1,000 discount on rates they would have paid\r\n Rate rises for businesses losing existing relief will be capped at £50 a month\r\n 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\r\n Privately-owned SMEs to get extra year to prepare for tax digitisation and quarterly reporting\r\n Review of taxation of North Sea oil producers\r\n\r\n\r\n\r\n\r\n Personal taxation\r\n\r\n\r\n 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\r\n The increases, applying to earnings between £8,060 and £43,000, will raise £145m a year by 2021-22 at an average cost of 60p a week to those affected. All Class 4 earnings above £43,000 will continue to be taxed at 2% while those below £8,060 will pay nothing.\r\n Class 2 National Insurance, a separate flat rate contribution paid by self-employed workers making a profit of more than £5,965 a year, is to be scrapped as planned in April 2018\r\n 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\r\n No changes to National Insurance paid by the employed and employers or to income tax or VAT\r\n Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020\r\n\r\n\r\n\r\n\r\n \r\n\r\nThe state of the economy\r\n\r\n\r\n UK second-fastest growing economy in the G7 in 2016\r\n Growth forecast for 2017 upgraded from 1.4% to 2%\r\n But GDP downgraded to 1.6%, 1.7%, 1.9% in subsequent years, then 2% in 2021-22\r\n Annual rate of inflation forecast to rise from 2.3% to 2.4% in 2017-18 before falling to 2.3% and 2.0% in subsequent years\r\n A further 650,000 people expected to be in employment by 2021\r\n\r\n\r\n\r\nPublic borrowing/deficit/spending\r\n\r\n\r\n Annual borrowing £51.7bn in 2016-17, £16.4bn lower than forecast\r\n Borrowing forecast to total £58.3bn in 2017-18, £40.6bn in 2018-19, £21.4bn in 2019-20 and £20.6bn in 2020-21\r\n Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.6% this year, then 2.9%, 1.9%, 1% and 0.9% in subsequent years, reaching 0.7% in 2021-22. But borrowing still predicted to be £100bn higher by 2020 than forecast in March 2016\r\n Debt rose to 86.6% this year, but will fall to 79.8% in 2021-22\r\n\r\n\r\n\r\nAlcohol, tobacco, gambling and fuel\r\n\r\n\r\n No increases in alcohol or tobacco duties on top of those previously announced\r\n A new minimum excise duty on cigarettes based on a packet price of £7.35\r\n Tobacco will rise by 2% above Retail Price Index (RPI) inflation, with a packet of 20 cigarettes costing 35p more\r\n Duty on beer, cider, wine and spirits will increase in line with RPI inflation\r\n This will equate to 2p on a pint of beer, 1p on a pint of cider, 36p on a bottle of whisky and 32p on a bottle of gin\r\n Fuel duty frozen for a further year\r\n Vehicle excise duty rates for hauliers and the HGV Road User Levy frozen for another year\r\n\r\n\r\n\r\nPensions and savings\r\n\r\n\r\n Reduction in tax-free allowance on share dividends from £5,000 to £2,000\r\n The measure, affecting small business owners and investors, will come into force in April 2018, raising £2.63bn by 2021-2022\r\n Dividend income paid on shares held in a stocks and shares ISA will remain tax free.\r\n Measures to tackle abuse of overseas pension schemes\r\n\r\n\r\n\r\nEducation (England only)\r\n\r\n\r\n £300m to support 1,000 new PhD places and fellowships in STEM (science, technology, engineering and maths) subjects\r\n Free school transport extended to all children on free school meals who attend a selective school\r\n Upgrade fund of £216m for existing schools\r\n £320m of funding for 110 new free schools and grammar schools\r\n New T-Levels to be introduced to give parity of esteem for technical education\r\n Number of hours of training for technical students aged 16 to 19 increased by more than 50%, including a high-quality, three-month work placement\r\n\r\n\r\n\r\nHealth and social care\r\n\r\n\r\n £100m to place more GPs in accident and emergency departments for next winter\r\n Additional £325m to allow the first NHS Sustainability and Transformation Plans to proceed\r\n An extra £2bn for social care over next three years, with £1bn available in the next year\r\n Long-term funding options to be considered but so-called “death tax” on estates ruled out\r\n Most sugary soft drinks to be taxed at 24p per litre as part of plans to reduce childhood obesity\r\n\r\n\r\n\r\nHousing/infrastructure/transport/regions/science\r\n\r\n\r\n Transport spending of £90m for the north of England and £23m for the Midlands to address pinch points on roads\r\n £690 million competition fund for English councils to tackle urban congestion.\r\n £270m for new technologies such as robots and driverless vehicles\r\n £16m for 5G mobile technology and £200m for local broadband networks\r\n £250m in funding for Scottish Government, £200m for Welsh Governmentand £120m for Northern Ireland Executive\r\n\r\n\r\n\r\nWomen\r\n\r\n\r\n New funding totalling £20m to support the campaign against violence against women and girls\r\n A further £5m committed to project to celebrate the centenary of women first getting the vote, and to educate young people about its significance\r\n Funding of £5m to support people returning to work after a career break\r\n\r\n

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Philip Hammond has delivered his first Budget as chancellor. With two Budgets in one year, there is potential to make a major impression on UK business and personal household finances. In the first, ‘Spreadsheet Phil’ said that he was supporting families while not spending recklessly.\r\n\r\nAlthough relatively low-key, there are other changes are already planned. This could add up to a significant financial impact – even before the next Budget in November.\r\n\r\nThese are the key points:\r\n\r\nBusiness\r\n\r\n\r\n £435m for firms affected by increases in business rates, including £300m hardship fund for worst hit\r\n Pubs with rateable value of less than £100,000 to get a one-year £1,000 discount on rates they would have paid\r\n Rate rises for businesses losing existing relief will be capped at £50 a month\r\n 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\r\n Privately-owned SMEs to get extra year to prepare for tax digitisation and quarterly reporting\r\n Review of taxation of North Sea oil producers\r\n\r\n\r\n\r\n\r\n Personal taxation\r\n\r\n\r\n 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\r\n The increases, applying to earnings between £8,060 and £43,000, will raise £145m a year by 2021-22 at an average cost of 60p a week to those affected. All Class 4 earnings above £43,000 will continue to be taxed at 2% while those below £8,060 will pay nothing.\r\n Class 2 National Insurance, a separate flat rate contribution paid by self-employed workers making a profit of more than £5,965 a year, is to be scrapped as planned in April 2018\r\n 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\r\n No changes to National Insurance paid by the employed and employers or to income tax or VAT\r\n Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020\r\n\r\n\r\n\r\n\r\n \r\n\r\nThe state of the economy\r\n\r\n\r\n UK second-fastest growing economy in the G7 in 2016\r\n Growth forecast for 2017 upgraded from 1.4% to 2%\r\n But GDP downgraded to 1.6%, 1.7%, 1.9% in subsequent years, then 2% in 2021-22\r\n Annual rate of inflation forecast to rise from 2.3% to 2.4% in 2017-18 before falling to 2.3% and 2.0% in subsequent years\r\n A further 650,000 people expected to be in employment by 2021\r\n\r\n\r\n\r\nPublic borrowing/deficit/spending\r\n\r\n\r\n Annual borrowing £51.7bn in 2016-17, £16.4bn lower than forecast\r\n Borrowing forecast to total £58.3bn in 2017-18, £40.6bn in 2018-19, £21.4bn in 2019-20 and £20.6bn in 2020-21\r\n Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.6% this year, then 2.9%, 1.9%, 1% and 0.9% in subsequent years, reaching 0.7% in 2021-22. But borrowing still predicted to be £100bn higher by 2020 than forecast in March 2016\r\n Debt rose to 86.6% this year, but will fall to 79.8% in 2021-22\r\n\r\n\r\n\r\nAlcohol, tobacco, gambling and fuel\r\n\r\n\r\n No increases in alcohol or tobacco duties on top of those previously announced\r\n A new minimum excise duty on cigarettes based on a packet price of £7.35\r\n Tobacco will rise by 2% above Retail Price Index (RPI) inflation, with a packet of 20 cigarettes costing 35p more\r\n Duty on beer, cider, wine and spirits will increase in line with RPI inflation\r\n This will equate to 2p on a pint of beer, 1p on a pint of cider, 36p on a bottle of whisky and 32p on a bottle of gin\r\n Fuel duty frozen for a further year\r\n Vehicle excise duty rates for hauliers and the HGV Road User Levy frozen for another year\r\n\r\n\r\n\r\nPensions and savings\r\n\r\n\r\n Reduction in tax-free allowance on share dividends from £5,000 to £2,000\r\n The measure, affecting small business owners and investors, will come into force in April 2018, raising £2.63bn by 2021-2022\r\n Dividend income paid on shares held in a stocks and shares ISA will remain tax free.\r\n Measures to tackle abuse of overseas pension schemes\r\n\r\n\r\n\r\nEducation (England only)\r\n\r\n\r\n £300m to support 1,000 new PhD places and fellowships in STEM (science, technology, engineering and maths) subjects\r\n Free school transport extended to all children on free school meals who attend a selective school\r\n Upgrade fund of £216m for existing schools\r\n £320m of funding for 110 new free schools and grammar schools\r\n New T-Levels to be introduced to give parity of esteem for technical education\r\n Number of hours of training for technical students aged 16 to 19 increased by more than 50%, including a high-quality, three-month work placement\r\n\r\n\r\n\r\nHealth and social care\r\n\r\n\r\n £100m to place more GPs in accident and emergency departments for next winter\r\n Additional £325m to allow the first NHS Sustainability and Transformation Plans to proceed\r\n An extra £2bn for social care over next three years, with £1bn available in the next year\r\n Long-term funding options to be considered but so-called “death tax” on estates ruled out\r\n Most sugary soft drinks to be taxed at 24p per litre as part of plans to reduce childhood obesity\r\n\r\n\r\n\r\nHousing/infrastructure/transport/regions/science\r\n\r\n\r\n Transport spending of £90m for the north of England and £23m for the Midlands to address pinch points on roads\r\n £690 million competition fund for English councils to tackle urban congestion.\r\n £270m for new technologies such as robots and driverless vehicles\r\n £16m for 5G mobile technology and £200m for local broadband networks\r\n £250m in funding for Scottish Government, £200m for Welsh Governmentand £120m for Northern Ireland Executive\r\n\r\n\r\n\r\nWomen\r\n\r\n\r\n New funding totalling £20m to support the campaign against violence against women and girls\r\n A further £5m committed to project to celebrate the centenary of women first getting the vote, and to educate young people about its significance\r\n Funding of £5m to support people returning to work after a career break\r\n\r\n

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