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A number of new and existing announcements were made, a list of key points can be found here
BUDGET MARCH 2017 – key points
From April 2017: new announcements
- Package of measures to give some relief to those small businesses particularly badly affected by business rates revaluation.
- Threshold for simplified ‘cash basis’ accounting for self-employed businesses raised from VAT registration threshold to £150,000 for 2017/18, and extended to landlords.
From April 2017: previously announced
- Income Tax rates and allowances confirmed as announced at Budget 2016: tax-free personal allowance will be £11,500, threshold for 40% tax will be £45,000.
- National Insurance thresholds for employers and employees made consistent at £157 per week.
- Tax and National Insurance advantages of ‘salary sacrifice’ schemes withdrawn, apart from arrangements involving pensions, childcare, Cycle to Work and ultra-low emission cars.
- New £1,000 tax-free allowances for trading and property income apply for 2017/18 tax year.
- New tax-free childcare arrangements to be introduced on a trial basis and rolled out to all taxpayers over the coming year.
- Tax advantages of foreign domiciled status will be lost for those resident in the UK for 15 of the last 20 years, and UK property held by a foreign domiciled individual through offshore structures becomes chargeable to Inheritance Tax.
- ISA investment limit rises from £15,240 to £20,000 per year, of which £4,000 can be in the new ‘lifetime ISA’.
- Public sector employers become responsible for tax due from individuals working for them through personal service companies and similar arrangements where there is an underlying employment relationship.
- Limit on pension contributions for those who have already made a flexible income drawdown from a money purchase pension scheme will fall from £10,000 per year to £4,000 per year. Limit for those who have not made such a drawdown remains £40,000.
- Main rate of Corporation Tax falls to 19% from 1 April 2017.
- Benefit of VAT Flat Rate Scheme almost completely withdrawn for businesses spending less than 2% of their turnover or less than £1,000 per year on goods, excluding capital goods, food, vehicles and fuel.
- Reforms to restrict interest relief and amend the rules for brought forward losses for corporation tax.
- From 1 June 2017, Insurance Premium Tax rises from 10% to 12%.
April 2018: new announcements
- Making Tax Digital’ reforms require businesses and landlords with turnover above the VAT registration threshold (£85,000 for 2017/18) to make quarterly online reports updating their tax position; businesses below the threshold will not be affected until April 2019 (when turnover threshold will be £10,000).
- Class 4 National Insurance Contributions rate on profits between lower threshold and upper limit (for 2017/18: £8,164 to £45,000) rises from 9% to 10% (and from 10% to 11% in April 2019).
- Nil rate band for dividend income, introduced at £5,000 for tax year 2016/17, reduced to £2,000 for 2018/19.
April 2018: previously announced
- Class 2 National Insurance Contributions for self-employed abolished.