Spring Budget - March 2017
March saw the Chancellor Philip Hammond deliver his first – and last – Spring Budget before a move to just one annual Autumn Budget covering tax and spending.
In his opening statement, the Chancellor confirmed, “As we start our negotiations to exit the European Union, this Budget takes forward our plan to prepare Britain for a brighter future” suggesting a positive slant on the delivery of his proposals.
Whilst there were no real surprises, there were several pieces of good news announced, as the Chancellor confirmed that the economy is growing faster than predicted in last year’s Autumn Statement:
- Mr Hammond listened to the concerns of small businesses regarding the proposed increases in business rates by introducing various specific measures and giving local authorities £300m to deliver discretionary relief to target individual hard cases.
- He also recognised the crisis in social care and local authorities will receive more funding to help in the short term. It was announced that a fundamental review would be carried out with the intention of finding a more lasting solution in the future. But this will not involve the introduction of a “Death Tax”.
- He announced more funding for education and free schools, and increased spending on infrastructure, including £90m for roads in “The North” – hopefully this will mean improvements to roads in Yorkshire.
- Businesses below the VAT threshold will not need to report quarterly to HMRC until April 2019 – a delay of one year.
However, the bad news includes the following tax changes which will affect many small businesses and individuals:
- The tax-free level of dividends will reduce in April 2018 to £2,000 from £5,000.
- The amount which can be paid into pension schemes by people who have already accessed their money purchase pension savings will reduce to £4,000 (from £10,000) from 6 April 2017.
Overall, the proposals seem fair in today’s economic climate. Hopefully this will mean that businesses and families can plan ahead with reasonable levels of certainty - even though the full effects of Brexit are still unknown. Watch this space!
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