The Chancellor’s first – and last – Spring Budget
The Spring Budget 2017 will be the last of its type. Probably.
The publication of the Finance Bill in the spring/summer of this year will presage a change in Parliamentary proceedings. A second Budget in autumn 2017 followed by a Spring Statement in 2018 marks the start of a process enabling Parliament to scrutinise tax changes well before the tax year where most will take effect.
As if the domestic ‘flip-flopping’ of a long-standing timetable wasn’t enough, the Chancellor, Philip Hammond, delivered his first Budget speech against a backdrop of Brexit uncertainty.
Before he stood up, punters could have obtained long odds about witnessing a wise-cracking ‘Spreadsheet Phil’, as he has become known, standing at the despatch box (the joke-o-meter registered seven during his hour-long address).
For starters, as part of a fiscally-tight Budget there was the Chancellor’s decision to target the self-employed, company owners and investors in a bid to raise billions of pounds and provide a “strong and stable platform” for the UK’s negotiations as it navigates a path away from the EU.
He also proposed to enhance the fairness in the UK’s tax system with a view to transforming the economy into one that works for everyone.
With ISA allowances set to be worth £20,000 from April 2017 and a reduction from £5,000 to £2,000 in the tax-free dividend allowance from April 2018, here are two opportunities offering professional advisers the chance to demonstrate their expertise admirably to clients.
Throw in the need for businesses to seek out rates advice on their premises following the impending changes to the system, combined with the relief measures announced by the Chancellor, and the Spring Budget could prove a Spring-board to the forging of robust relationships between advisers and clients.
And that’s before the Chancellor even deigns to delve back into his joke book to help buff up his Autumn Budget announcements…
- A reduction in the dividend allowance from the current £5,000 to £2,000 from 2018/19.
- A 1% increase in the main Class 4 NIC rate to 10% for 2018/19 and a further 1% addition to 11% for 2019/20.
- A one year deferral in the start date for Making Tax Digital (MTD) for unincorporated businesses and landlords whose turnover is below the VAT threshold (£85,000 from 1 April 2017).
- An increase in the personal allowance for 2017/18 to £11,500 and a corresponding rise in the higher rate threshold to £45,000, although in Scotland the latter figure will only apply to savings and dividend income.
- A new 25% tax charge on transfers to qualifying recognised overseas pension schemes (QROPS), other than for those who have ‘a genuine need’ to transfer.
- Three measures to help small businesses cope with the changes to business rates, due to take effect in April 2017, starting with a new £50 a month cap (in 2017/18 only) for businesses that lose Small Business Rate Relief.
- The publication later in the year of a green paper examining the funding of social care, although the Chancellor ruled out the rumoured ‘death tax’. In the interim an additional £1bn is to be made available for social care funding in 2017/18.
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