2017 Budget Highlights

Treasury Chancellor Philip Hammond has announced his 2017 Budget. Here is the summary of the key changes in the Budget:

• Personal Allowance will rise from £11,000 to £11,500 in 2017/18. This is forecast to reach £12,500 by 2020.
• Higher rate Threshold increased from £43,000 to £45,000.
• From 6 April 2017, the £5,000 tax free allowance on dividends will be reduced to £2,000.
• From 6 April 2017 the annual ISA allowance will rise from £15,240 to £20,000.
• Class 4 National Insurance contributions for the self employed to increase from 6 April 2017.
• From 1 April, the benefit of the VAT Flat Rate Scheme will largely be removed for “Limited cost traders”. This constitutes most single director consultancy businesses in the IT, advertising and finance industries.
• From 6 April 2017, the inheritance tax threshold of £325,000 will be joined by an additional residence nil rate band of £100,000.
• A 25% tax charge will be levied on all transfers of UK pensions to qualifying overseas schemes.
• From 6 April 2017 individuals who have withdrawn money from their pensions will only be able to contribute £4,000 per annum rather than £10,000.
• The introduction of quarterly reporting of tax returns is proposed under the government’s new Making Tax Digital for Business (MTDfB) will be effective for most businesses and landlords from 6 April 2018.

In summary, there are no major surprises in the Budget. Overall, the budget does not favour contractors, self employed and small businesses. Pensioners and landlords are also worse off.

A more detailed analysis of the Budget will follow. Please monitor the website for updates. Belsize Accountancy are specialist accountants for contractors and small businesses.