Summary of Spring Budget 2017

Summary of Spring Budget 2017

12. £270 million to launch the Industrial Strategy Challenge Fund

Initial funding will support research and innovation in universities and businesses, in areas like:

  • developing artificial intelligence and robotics that will work in extreme environments, like offshore energy, nuclear energy and space
  • designing and manufacturing better batteries for new electric vehicles that will help improve our air quality
  • improving medicine manufacturing technologies to speed up patient access to drugs

13. Improving transport with the National Productivity Investment Fund (NPIF)

The government is funding improvements to transport infrastructure, including:

  • £690 million for new local transport projects, to improve congestion on roads and public transport
  • £220 million to improve congestion points on national roads, with £90 million going to the North and £23 million to the Midlands
  • supporting local projects in the next twelve months like improvements on the A483 corridor in Cheshire and on the Leicester Outer Ring Road

14. A new strategy to make the UK a world leader in 5G technology

£16 million for a national 5G Innovation Network to trial new 5G technology.

And £200 million for local projects to build fast and reliable full-fibre broadband networks.

15. A three-year NS&I Investment Bond with a market-leading interest rate of 2.2 per cent

The bond will be available for 12 months from April 2017.

The government announced the NS&I Investment Bond at Autumn Statement 2016. It will be open to everyone aged 16 and over with the flexibility to save between £100 and £3,000 over three years.

16. The Lifetime ISA will be available from 6 April this year

The Lifetime ISA will allow younger adults to save up to £4,000 each year and receive a bonus of up to £1,000 a year on these contributions. Funds can be withdrawn tax-free to put towards a first home or saved until a person turns 60.

17. Marking International Women’s Day

A new £5 million fund will go to projects celebrating the 100th anniversary of the Representation of the People Act next year, and to educate young people about its significance. The Representation of the People Act (1918) was the first legislative step towards equal voting rights for men and women.

Working with businesses and the public sector, the government will also invest £5 million to increase the number of returnships, helping people back into employment after a career break.

And another £20 million will support organisations working to combat domestic violence and abuse or supporting victims. This increases the total funding for implementing the government’s Ending Violence Against Women and Girls Strategy to £100 million by the end of Parliament.

18. Small Businesses and landlords under the VAT threshold will have an extra year to prepare for Making Tax Digital (MTD)

Unincorporated businesses (businesses owned privately by one or more people) that have an annual turnover below the VAT registration threshold will have until April 2019 to prepare before MTD becomes mandatory.

Under MTD, businesses will use digital software to keep tax records and update HMRC quarterly.

19. £435 million to support businesses affected by the business rates relief revaluation

This means no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year than they did in 2016-17.

Funding for local authorities will allow them to provide £300 million of discretionary relief to provide help to businesses most affected by the revaluation.

And from April 2017, pubs with a rateable value up to £100,000 will be able to claim a £1,000 business rates discount for one year.

20. The main rate of National Insurance contributions (NICs) for the self-employed will increase

Currently, the self-employed may have to pay both Class 4 and Class 2 NICs:

  • Class 4 NICs at 9 per cent are paid on profits between £8,060 and £43,000
  • Class 2 NICs are paid on profits of £5,965 or more

From 2018, Class 2 NICs will be abolished. Class 4 NICs will rise to 10 per cent in April 2018 and to 11 per cent in April 2019.

Taken together, only a self-employed person with profits over £16,250 will have to pay more as a result of these changes.

This better reflects the fact that the differences in contributory benefit entitlement between the self-employed and employees are now small, following the introduction of the new State Pension in April 2016.

In the summer, the government will also consider whether there is a case for greater consistency in parental benefits between the employed and self-employed.

21. Tax-free dividend allowance will be reduced from £5,000 to £2,000 from April 2018

This will reduce the tax difference between the self-employed and those working through a company. Typically, general investors will need over £50,000 worth of stocks and shares outside an ISA to be affected.

Find out more here.

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