Budget 2017

Chancellor Philip Hammond has represented his first budget. In comparison with Autumn Statement his speech was more optimistic due to the growth in the UK economy and cutting borrowing. However, his attitude for tough financial policy and austerity is still in force. Below are the key points of the new budget.

The economic growth

New forecast for the economy growth is 2% in 2017 (previously 1.4%).

Employment has reached a record high of 31.8 million people. It is expected that the number of employed people will increase by 650000 by 2021

Forecast for annual rate of inflation is rising from 2.3% to 2.4% in 2017-18

Personal taxation

For self-employed Class 4 NIC rate will increase from 9% to 10% in April 2018 and 11% in April 2019. All Class 4 earnings above £43000 will continue to be taxed at 2%

Class 2 NIC flat rate for self-employed who make a profit of more than £5965 a year will be scrapped in April 2018

Personal tax-free allowance will increase to £11500 this year and to £12500 by 2020

Business

£435 m will be allocated for companies impaired by increases in business rates

Pubs with taxable value of less than £100000 will get a one-year discount of £1000

£820 m will be allocated for tax avoidance clampdown

Privately owned small and medium companies will get one extra year to prepare for tax digitisation and quarterly reporting

Public borrowing

Actual annual borrowing in 2016-17 was £51.7 bn. This is £16.4 bn lower than forecast

Borrowing forecast to total £58.3 bn in 2017-18 with further decrease to £20.6 bn in 2020-21

Debt rose to 86.6% this year, however will fall to 79.8% in 2021-22

Savings and pensions

Tax-free allowance on share dividends will be reduced from £5000 to £2000

Dividend income paid on shares held in stocks and shares ISA will remain tax free

There are some provisions to tackle abuse of overseas pension scheme

Education (England only)

Upgrade fund of £216 m for existing schools

£320 m will be allocated for 110 new free schools and grammar schools

£300 m will be allocated for 1000 new PhD places in science, technology, engineering and maths

New T-Levels will be introduced for technical education, and for technical students aged 16 to 19 the number of hours will be increased by 50% including three-months work placement

Health and social care

An extra £2 bn will be allocated for social care over next three years

£100 m to place more General practitioners in A&E departments next winter

Additional £325 m will be raised to proceed with the first NHS Sustainability and Transformation plans

Housing, infrastructure, transport, regions, science

£90 m for the north of England and £23 m for the Midlands will be allocated for the road improvements

£270 m will be allocated for new technologies such as robots and driverless vehicles

3690 million competition fund for English councils to tackle urban congestion

The following funds will be allocated for:

  • Scottish Government - £250 m
  • Welsh Government - £200 m
  • Northern Ireland Executive - £120 m