The 2017 Spring Budget saw the usual announcement of statistics and estimates for productivity, growth and borrowing, as well more jokes and one liners than we’ve ever seen a Chancellor “perform” in the House of Commons (and in fairness we did find some of them quite funny!).

With an unsure financial future ahead it wasn’t surprising that the Chancellor didn’t change much, though he did confirm a few things we already knew were coming:

  • Corporation tax is being gradually reduced to 17% by 2020
  • Personal Allowance will increase to £11,500 from April 2017
  • VAT registration threshold will increase to £85,000

However, he did announce a couple of unexpected items which taxpayers should be aware of:

  • Reduction in the dividend allowance – as discussed in our blog article Tax Free DividEND! the current dividend allowance for 2016/17 is £5,000, but from April 2018 this drops to £2,000. It may not sound like a lot but for some taxpayers this will be the difference between being tax free and being taxed.
  • Increase in Class 4 NIC – with the abolition of Class 2 NIC, a rise to compensate for the loss of Class 4 was inevitable. From April 2018, there will be a 1% increase to 10% and another increase in April 2019 to 11%.
  • Making Tax Digital – as most self-employed businesses, partnerships and landlords have to supply records quarterly to HMRC from April 2018, a delay for smaller businesses was a welcome announcement. Any business under the VAT threshold can wait until April 2019 before having to “go digital”.
  • Research and Development – it was announced that the Treasury would look at reducing the administrative burden of Claim R&D tax relief which will definitely be welcomed by any company claiming this relief.

If you would like to discuss how any of the changes announced in the budget will impact you, please do contact us on 01642 244 090.