9th March 2017

Spring Budget 2017

R&D tax credits:The government will be publishing measures aimed at reducing the administrative burden for businesses. Learn more about R&D tax credits.

Making tax digital: Businesses with turnover that is less than the VAT registration threshold (currently £83,000) will have the introduction of quarterly digital reporting delayed by 12 months.

Business rates in England:There will be further consultation on possible measures to reform the business rate revaluation process. In the meantime, 3 measures relating to business rates were announced:-

• businesses coming out of small business rate relief will have an additional cap meaning that any bill increase for the next year will not be more than £50 a month
• a £1,000 discount will be introduced in 2017 for pubs with a rateable value of less than £100,000
• a £300 million discretionary fund will be made available to local authorities to target individual businesses that are struggling with rate rises.

Corporation tax: will fall to 19% from April this year – the lowest in the G20. By 2020 it will fall to 17%.

Key Personal Announcements

Dividend allowance:The tax-free dividend allowance - which was only introduced last year - will reduce from £5,000 to £2,000 from April 2018.

National insurance contributions: Main rate of class 4 national insurance contributions will increase to 10% in April 2018 and to 11% in April 2019.

Personal allowance: From April 6 2017, the tax-free personal allowance for income tax will rise by £500 to £11,500 and the threshold for higher rate tax payers will increase from £43,000 to £45,000. The personal tax-free allowance will rise to £12,500 and the higher rate threshold will rise to £50,000 by 2020 as planned.

Tax-free childcare:From September 2017, working parents with 3 and 4 year old children will have their tax-free entitlement doubled to 30 hours a week.

The National Living Wage: will rise to £7.50 per hour in April.

Other Announcements

Measures were introduced to reduce tax avoidance, evasion and non-compliance, including action to stop businesses converting capital losses into trading losses and tackling abuse of foreign pension schemes.

Beer, cider, wine and spirits duties will increase by the Retail Prices Index measure of inflation.

Tobacco duties will increase by 2% above the Retail Prices Index measure of inflation from 6pm on Wednesday evening. New minimum excise duty on cigarettes based on a pack price of £7.35, which will affect the price of cheaper brands.

Budget Summary kindly supplied by Jeffreys Henry LLP

Budget