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Talking Point - March 2017 Budget

Talking Point - March 2017 Budget

In his first budget since the UK’s decision to leave the EU, Chancellor Philip Hammond said he was setting out the government’s “plan to prepare Britain for a brighter future”.

Although the British economy grew faster than most major advanced economies last year – second only to Germany – the Chancellor stressed that “we cannot rest on past achievements”.

Taxes and pay

From April 2017, the National Living Wage will increase from £7.20 to £7.50 per hour.

The Personal Allowance will increase by £500 to £11,500 from April 2017 – this will rise again to £12,500 by 2020.

The higher rate income tax threshold will increase from £43,000 to £45,000 from April 2017, and again to £50,000 by end of the current parliament.

The Dividend Allowance, which allows shareholders to take the first £5,000 of dividends tax free, will be reduced to £2,000 from April 2018.

Savings

The annual ISA subscription limit will increase to £20,000 from 6 April 2017, as previously announced.

A new National Savings & Investments bond will be available for 12 months, from April 2017. It will pay 2.2% over a three year period, on deposits between £100 and £3,000.

Business

To support the government’s vision of the UK being the best place in the world to start and grow a business, Corporation Tax will fall to 19% from April 2017, and again to 17% in 2020.

£435m is being made available for firms affected by increases in business rates (with a £300m hardship fund being available for those worst affected in England). No business losing small business rate relief will see their bill increase by more than £50 a month, next year.

Currently, a self-employed person may have to pay both Class 2 and Class 4 National Insurance Contributions (NICs). From 2018, Class 2 NICs will be abolished. Class 4 NICs will increase by 1% to 10% in April 2018, and to 11% in April 2019. Only self-employed people with profits in excess of £16,250 will pay more as a result of the changes.


Education

The Chancellor stressed that every child should have the opportunity to go to a ‘good’ or ‘outstanding’ school (currently 89% of schools in England). In addition to the existing commitment of 500 new free schools, a further 110 were announced (including selective schools).

To support accessibility and choice, free school transport will be extended to all children who attend selective schools, and are in receipt of free school meals.

The government will also be investing an additional £260m, over three years, to support the development of existing schools.

T-Levels are being introduced, from Autumn 2019, to allow greater focus on technical education. In addition, the number of training hours for 16 to 19 year olds will be increased by more than 50% (and will include a three month work placement).

1,000 new PHD places will be supported through £90m of funding for new academic research placements in areas such as science, engineering, technology and maths.

Maintenance loans will be made available to those entering part-time degrees, and doctoral loans of up to £25,000 will be available to support those in higher level study, from 2018/19.

Children and childcare

For each child under the age of 12, £2,000 per year will be available towards the cost of childcare (this will be £4,000 for disabled children who will receive this up until the age of 17). Parents of younger children will be able to apply for the scheme first, with all eligible parents able to apply by the end of this year.

The planned increase of free childcare for three and four year olds (from 15 to 30 hours per week) will be rolled-out across England, from September 2017.

For women

The Chancellor announced a £5m returnship fund to enable (mainly) women back into the workplace following a career break to care for children.

Health and social care

The Chancellor stressed the importance of joined-up working between local authorities and the NHS. He announced additional grant funding of £2bn for social care over the next three years, in England. £1bn of this will be available in 2017/18 to commission new care packages.

£100m of capital will be made available in England to support GP triage services in A&E departments, in time for next winter.

If you would like to discuss any aspect of your finances with your Finnacial Consultant, call us today on 0800 980 6348 (quoting ref 80786) or email us.

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