Budget 2017: What it means for you!

Chancellor Phillip Hammond delivered his first Budget in the House of Commons for 2017 earlier today. A couple of unexpected items came out, the main points are:

HEALTH AND SOCIAL CARE

  • Extra grant funding of £2bn to social care in England over the next three years, with £1bn available in 2017/18. Green paper to discuss options for future funding.
  • £100m immediately for on-site GP triage in NHS A&E departments to alleviate waiting times.

EDUCATION

  • Introduction of T-Levels for technical qualification in further education. £500m annual investment eventually to increase, by over 50%, the number of hours training for 16-19 year old technical students including a “high-quality” three-month work placement for every student.
  • Funding for a further 110 new free schools, on top of the current commitment to 500, including new specialist maths schools. Extending free school transport to all kids on free school meals.

ALCOHOL AND TOBACCO

  • New minimum excise duty on cigarettes based on a pack price of £7.35. No changes to previously planned upratings of duties on alcohol and tobacco.

TAX

  • The main rate of class 4 National Insurance contributions (higher-paid, self-employed) to increase by 1% to 10% in April 2018 and 11% in April 2019.
  • Tax-free dividend allowance to be reduced from £5,000 to £2,000 from April 2018.
  • Clampdown totalling £820m on tax avoidance to include action to stop businesses converting capital losses into trading losses, tackle abuse of foreign pensions schemes and introduce UK VAT on roaming telecoms services outside the EU.
  • Government committed to increase thresholds for income tax to £12,500 for basic rate and £50,000 for the higher rate by the end of this Parliament.

BUSINESS RATES

Recognises system must better reflect digital age. Three measures to help firms:

  • Any business coming out of Small Business Rate Relief will benefit from an additional cap.
  • A £1,000 discount on business rates bills in 2017 for all pubs with a rateable value of less than £100,000.
  • Local authorities will get £300m fund to deliver discretionary relief to target individual hard cases.

INVESTMENT

  • Allocating £300m to support the brightest and the best research talent.
  • There will be £270m “to keep the UK at the forefront of disruptive technologies like biotech, robotic systems and driverless vehicles.”
  • New 5G mobile technology hub to get £16m. £200m for local projects to “leverage private sector investment in full-fibre broadband networks”.

UK/REGIONS

  • Extra £350m for the Scottish Government; £200m for the Welsh Government and almost £120m for an incoming Northern Ireland Executive …”demonstrating once again that we are stronger together… in this great, United Kingdom.”
  • North to get £90m for transport. £23m for Midlands.

FAMILIES

  • Taking action to protect consumers from unexpected fees or unfair clauses, to simplify T&Cs, and to give consumer bodies greater enforcement powers.
  • Commits £5m to promoting ‘returnships’ to the public and private sector, helping people back into employment after a career break.

ECONOMY

  • OBR revises down public sector net borrowing for 2016/17 – will be £16.4bn lower than forecast in Autumn at £51.7bn. Then £58.3bn, £40.8bn, £21.4bn, £20.6bn and £16.8bn in 21/22.
  • OBR forecasts growth in 2017/18 from upgraded 1.4% to 2%, slowing to 1.6% in next year to 1.7% in following year.
  • The main unexpected point being the cut in the dividend tax allowance from £5,000 to £2,000 which effectively costs self employed Directors £240 per year and an increase in class 4 National Insurance contributions.