Chancellor Philip Hammond’s first Spring Budget may not have contained too many new announcements but certainly contained a lot of controversy. This is also his last Spring Budget. The next budget will be in the Autumn and will be followed by a Spring announcement.
The main measures announced were as follows:
- a £435m package for firms in England affected by the business rates revaluation, with a cap on rate rises for those losing existing business rates relief and a £300m local authority ‘hardship fund’.
- A 12-month delay in the implementation of the Making Tax Digital measures for unincorporated businesses and landlords with turnover below the VAT registration threshold. These will now have until 2019 to prepare for quarterly reporting.
- An increase in the main rate of Class 4 national insurance contributions (NICs) from 9% currently to 10% in April 2018 and 11% in April 2019.
- A significant reduction in the tax-free dividend allowance. This was introduced from April 2016 at £5,000 at the same time that a dividend tax of 7.5% was introduced. This will be reduced to £2,000 in April 2018.
Other announcements were as follows:
- The introduction of new ‘T-Levels’ for 16-19 year olds studying technical subjects from Autumn 2019
- Funding for 110 new free schools.
- The introduction of the new Tax-Free Childcare scheme, a three-year NS&I Investment Bond offering 2.2% interest on balances up to £3,000 and the new Lifetime ISA.
- Alcohol duties will be increased in line with inflation and duty on tobacco will increase by 2% above RPI inflation.
- The new Soft Drinks Industry Levy (sugar tax) will be set at 18p per litre.