Spring Budget 2017 – what it means for you and your business
Key points of the Spring Budget 2017
So, the last ever Spring Budget has come and gone. Most of us expected many of the Chancellor’s announcements to be about as welcome as a whoopee cushion at a funeral, but as always there was a mixed bag of news for individuals and businesses.
Skipping over the usual reams of information about the state of the economy and its growth, we thought we’d get straight to the nub of what the Budget means for you.
Here are the key points you need to be aware of.
From April 2018, Class 4 National Insurance payments for the self-employed will rise from 8% to 11%.
If you have a company or partnership, the news isn’t much better. Your tax-free dividend allowance will drop from £5,000 to £2,000.
If you have business premises, there is slightly better news. Business rates rises will be capped at £50 per month if you leave small business rate relief. Pubs will also get a £1,000 discount if they fall below a rateable value of £100,000. There will also be a £300m hardship fund for the worst affected small businesses.
Less welcome for digital entrepreneurs, the Chancellor stated that he wants to find a way of taxing the digital economy.
And on that note, he also announced a tax avoidance clampdown, including initiatives to stop businesses converting capital losses into trading losses and abuse of foreign pension schemes.
There was some better news, though. If your business’s turnover is below the VAT registration threshold, then you will not have to make quarterly tax reports under the Making Tax Digital plans until April 2019, giving you extra time to prepare (please get in touch if you would like help with this).
Individuals and Families
The tax-free childcare policy begins next month, meaning parents will be eligible for 30 hours of free childcare each week.
Just be careful when using your phone on holiday, though. The Chancellor is about to introduce VAT on roaming telecoms services outside the EU.
There’s also a £5m fund to support women returning to work after a career break.
If you smoke, there will be a new minimum excise duty on cigarettes, based on a packet price of £7.35. However there will be no extra increases on alcohol or tobacco duties other than those previously announced. Fuel also escapes any rise.
The sugar tax will also raise less than expected. The Chancellor claims this is because manufacturers are taking sugar out of their products.
There were other announcements about investing in social care and technical education, for example, but for individuals and businesses the overall message is pretty grim. If you’re self employed you’ll pay more National Insurance, and if you have a formal business you’ll be able to take out far less money as a tax-free dividend.
The Chancellor claims this will Brexit-proof the economy. Whether it does, remains to be seen.
Would you like more detail on this year’s Budget announcements? If so, download our free guide.