Budget speech notes:
- reduction in administrative burdens
- rates relief measures for small businesses and pubs
- raising revenues by tackling tax evasion/avoidance
- summer consultations on differences between the way that self-employed and employed workers are treated under NI
- reduces differences between employed and self-employed NIC contributions
- reduces differences between employed and incorporated dividend allowance of £5K tax free – director shareholder tax advantage will be cut from £5K to £2K from 2018
- annual ISA allowance rises to £20K, as planned
- no change to alcohol duty
- national living wage will be raised to £7.50/hr in April, personal allowance rising to £11.5K (£12.5k by end of parliament), higher rate will rise to £45K as planned, reaching £50K by end of parliament
- increasing childcare subsidies
- more spending on research and education
- transport infrastructure funds
- regions – Midlands energy strategy and additional Scotland/Wales/N. Ireland funding
- Introduces T levels for technical education, new institutes for technology, increasing spending for 16-19 year-olds
- Additional £2bn+ for social care over next 3 years, of which £1.2bn available in 2017-18
- Cutting inappropriate use of hospital A&E departments by making £100mn available for triage facilities in hospitals
Chancellor’s budget speech focussed on measures to support working families, improve training, and provide better funding for social care.
- The main spending item will be an additional GBP 1.45bn in funding for social care and other NHS spending – the total managed expenditure rises to 39.6% of GDP 2017-18, up from vs 39.3% in the current fiscal year (though this was down from 40% in 2015-16)
- There will be additional investment in schools, earmarked for 2018-19 and 2019-20
- There were no new major tax changes (beyond higher income tax and ISA thresholds already laid out in previous budgets), but funding has been set aside for small business rate payers.
- National Insurance contributions were tweaked to reduce inequality of treatment between employed and self-employed, and reduced incorporated dividend allowances. Increases in Class 4 NICs and the reduced dividend allowance contribute the lion’s share of new revenues from 2018-19.
- Hammond focussed on tackling inequality – he commented that real wages have risen for 27 months (although the OBR forecasts show that real wage growth will slow as inflation accelerates); and noted that the top 1% of income tax payers now pay 27% of all income tax.
See impact of policy decisions in the attached table, and budget documents at: https://www.gov.uk/government/publications/spring-budget-2017-documents/spring-budget-2017