Budget 2017 – Key Points

Here is a summary of the 2017 budget and its effect on the areas of personal taxation, businesses and the economy in general.

Personal Taxation

  • The tax rate for class 4 national insurance contributions for the self-employed to increase from 9% to 10% in April 2018 and 11% in April 2019. This increase applying to earnings between £8,060 and £43,000, is expected to raise £145m a year by 2021-22 at an average cost of 60p a week to those affected.
  • The Class 2 National Insurance, a separate flat rate contribution paid by self-employed workers making a profit of more than £5,965 a year, will be scrapped as planned in April 2018
  • No changes to National Insurance paid by the employed and employers or to income tax or VAT
  • Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020.

Business

  • £435m for firms affected by increases in business rates, including £300m hardship fund for worst hit
  • Rate rises for businesses losing existing relief will be capped at £50 a month
  • A £820m tax avoidance crackdown, including action to stop businesses converting capital losses into trading losses and introduction of UK VAT on roaming telecoms services outside the EU
  • Privately-owned SMEs to get extra year to prepare for tax digitisation and quarterly reporting

Economy

  • Growth forecast for 2017 upgraded from 1.4% to 2%
  • But GDP downgraded to 1.6%, 1.7%, 1.9% in subsequent years, then 2% in 2021-22
  • 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
  • A further 650,000 people expected to be in employment by 2021.

Source – http://www.bbc.co.uk/news/uk-politics-39203784

 

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