By Matthew Perry
This article has been updated since it was first published.
Here is what we heard about the UK’s future financial plans from the Spring Budget:
- The United Kingdom was 2nd only to Germany in economic growth in 2016.
- Pubs (exclusively) will receive a £1000 discount on their business rates to help British businesses thrive.
- Off-payroll worker reforms will be implemented as planned. Liability will now lie with the employer.
- Class 2 NIC’s will be abolished from April 2018.
Class 4 NIC’s will increase to 10% from April 2018.The Conservative Government have backtracked on their previous NIC increase proposal, cancelling the increases completely.
- Personal allowances for lower and upper tax bands will increase to £11,500 and £45,000 respectively (from April 2017).
- Dividend allowance will be reduced to £2000 from April 2018.
- ISA allowance will increase to £20,000 this year.
- Digitisation of company tax reporting is to be postponed until 2018 for those under the VAT threshold.
- Newly proposed VAT Flat Rate Scheme percentage for limited cost traders will be put in place April 2017.
- Corporation tax will be reduced to 17% in April 2020.
The Budget gave SME’s a boost in the wake of recent rate increases and increased competition from the threat of digital commerce. On the other hand, the self-employed are having to pay more tax while continuing to deal with a higher level of risk than an employee. This is due to concern that self-employed and employed all use the public services in the same way, yet they are not paying for them equally. While that may be true, there are many vocations that cannot be practised efficiently without going self-employed via a limited company or as a sole trader.
The Government could have softened the blow through a consultation prior to the Budget. Now many are left wondering what the changes mean for them. If the economy is to continue growing as it has been, the Government need to provide solutions to the complications they have now introduced.
If you are confused or concerned about anything that was said, we can help you make sense of the latest changes to tax and working regulations and are available on the phone or through any of our channels below. Further analysis will be made as announcements are released.
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