The Spring Budget 2017

The Chancellor’s first and last Spring Budget before it is moved to the Autumn has been dubbed a “Brexit Budget” centered around strengthening the country’s finances before we embark on the process of leaving the EU. We have summarised the key points below. For more detailed information on how the changes might affect you please call the office on 02920 735 502

Individuals 

Personal Allowance is increasing from £11,000 to £11,500 in April 2017.

National Insurance Contributions for Class 4 (Self-employed) are to rise to 10% in April 2018 and 11% in April 2019.

Tax-Free Dividend Allowance is to be reduced from £5,000 to £2,000 from April 2018.

NS&I Investment Bond with 2.2% interest rate over 3 years will be available from April 2017 for a maximum of £3,000.

VAT registration threshold rising to £85,000 and deregistration threshold falling to £83,000 in 2018.

Marriage Allowance will allow for the transfer of up to £1,150 of personal allowance to a spouse or partner from 6 April 2017.

LISA – A new savings product (Lifetime ISA) is available. It is designed to help young people save flexibly for the long-term throughout their lives and receive a bonus of up to £1,000pa.

Business

Corporation Tax rate will be reduced from 20% to 19% for the 2017/18 tax year and to 17% by 2020.

Annual Investment Allowance of £200,000 per annum remains available for companies and for unincorporated businesses.

Making Tax Digital rollout will begin from April 2018; however, for unincorporated businesses with a turnover below the VAT registration threshold, there will be a delay of one year to the introduction of quarterly reporting.

Relief from business rates increases  The Chancellor has announced funding of £435 million to support small businesses affected by the business rates relief evaluation. The help comes in the form of a standard cap on the actual increases and also discretionary relief from local authorities.

Payroll Pointers

National Living Wage – From April 2017 workers aged 25 and over will be entitled to a minimum of £7.50 per hour.

Employment Allowance (EA) will remain at £3,000 per annum from April 2017.

Company Cars HMRC will not be updating the P46 Car for in year reporting. In April 2018 HMRC will introduce a new version of the P46 along with a new P11D which will ask for details of any salary sacrificed.

Salary Sacrifice Schemes will, in some cases, no longer offer the same savings on tax and NI contributions.

Benefits in Kind – We will shortly be sending our P11D letters in the post to all Limited companies. If your employees receive any benefits in kind from the company please respond to the letter no later than 1st June 2017.

Apprentice Levy is being introduced to help young people get into apprenticeship schemes. It will be based on 0.5% of a company’s pay bill, with an allowance of £15,000.