Philip Hammond delivered his 2017 Spring Budget on 8 March 2017.   There will be a second Budget later in the year followed by annual winter Budgets. In addition, the Spring Budget will be replaced by a Spring Statement, starting in 2018

Income tax: Rates and allowances

As previously announced the personal allowance is increased to £11,500 and the basic rate band to £45,000 in 2017-18. The Government has confirmed its commitment to increase the allowance to £12,500 and increase the basic rate band to £50,000 by the end of the current parliament.

Making Tax Digital (MTD)

The MTD start date for self-employed business and landlords with turnover below the VAT threshold will be delayed by a year to April 2019.

Income Tax: Dividend allowance

The tax free dividend allowance is to be reduced from £5,000 to £2,000 from the 2018-19 tax year. This has been reported by some to be in response to the number of businesses incorporating primarily to convert taxable profits into tax-free dividends.

National Insurance: Increase in rate of Class 4 contributions

The previously announced abolition of Class 2 contributions with effect from the 2018-19 tax year will now go hand in hand with an increase in the Class 4 rate from 9% to 10%. Self-employed persons with profits over £16,250 will pay more national insurance as a result. The Class for rate will be increased again to 11% in 2019-20.                                                               

UPDATE 15 MARCH 2017 – The Government have reversed plans to increase Class 4 contributions

VAT: Registration and deregistration thresholds

From 1 April 2017 the VAT registration threshold will increase from £83,000 to £85,000 and the deregistration threshold from £81,000 to £83,000. By increasing the VAT registration threshold HMRC estimate that it will prevent 4000 small businesses from having to register for VAT by the end of 2017-18.