Highlights of Budget 2017 Measures Affecting Business

  1. pounds_cash_money_financePersonal allowances for all individuals will be increased to £11,500 from 6 April 2017 and to £12,500 from 6 April 2020.
  2. Shareholders in businesses will find the tax free level of dividends will be reduced to £2,000 from £5,000 from 6 April 2018.
  3. Class 2 National Insurance Contributions will be abolished from 6 April 2018, but Class 4 contributions will be increased from 9% to 10% from 6 April 2018 and to 11% from 6 April 2019. These rates are lower than the Class 1 contributions but the gap is being narrowed. The Chancellor gave the excuse that the self-employed used to pay less because their state pension and other benefits were lower but now the state pension is the same. However, this increase and the reduction in the Dividend Tax allowance mentioned above are part of a government attempt to level the playing field between employees and those self-employed or running their own small company. The government has been losing money with an increase in the self-employed and small companies.
  4. The VAT threshold at which businesses have to register for VAT has been increased to £85,000 from £83,000.
  5. There are many technical changes to VAT rules found in the small detail of the Budget which will affect many businesses.
  6. National Living Wage will be increased to £7.50ph from 6 April 2017, thereby increasing employment costs for some employers.
  7. Corporation Tax rates will be 19% for the financial year ended 31 March 2018 and will be down to 17% from 2020. Interestingly, tax receipts from Corporation Tax have increased since rates of tax have been reduced. Economically, reducing taxes stimulates the economy and often results in a larger tax take. It also encourages inward investment.
  8. The Chancellor has earmarked funds to protect small businesses from Business Rate increases, especially pubs.
  9. The government has announced multiple infrastructure projects to stimulate Productivity, including support of a 5G mobile hub, full fibre broadband and pinch points on various roads. These measures will help business and will create new employment opportunities.
  10. In an attempt to counteract the skills gap, the Chancellor announced the introduction of T-Levels as an alternative to A-Levels. These exams will be more technically based and will provide greater recognition for apprenticeship type routes and will hopefully encourage more young people to develop technical and more hands-on skills to help fill the skills gap in the UK.
  11. There appears to be no mention of changes to Capital Allowance. Some were hoping for new incentives for companies to invest. Incentives already exist but some wanted more.

The information above has been taken from the limited information available shortly after the Budget Speech and has been based on best information, but no action or inaction should be taken without taking advice first from a professional adviser. No liability is accepted for using the information above.

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