Have you seen our short Budget 2017 video? It touches on some of the big announcements the government have made in the face of Brexit.
Questions We Are All Asking...
How is our nation's economy in the wake of Brexit?
The Budget 2017 report suggested that the UK economy is growing. Employment has reached a record high: 31.8m people. The economy is expected to grow an extra 2% in 2017.
How is the Government preparing for our departure from the EU?
The Government have decided to cut on borrowing, and focus on stabilising the nation. In 2010 the UK borrowed £1 for every £5 spent - this has now changed to £1 for every £15.
Is any money actually being put into the NHS?
Sustaining and transforming the NHS into a better model seems to be the focus for the Government at the moment. Out of the £425 million pledged, £325 million will go into planning how to improve patient services in local regions. These plans will be developed by NHS Service Leaders and their local partners.
The remaining £100 million of this amount will go towards helping A&E departments manage demand ahead of the winter months.
Another benefit is that £2 billion has been budgeted for Adult Social Care over the next three years - in order to help ease pressure on the NHS.
7 Changes That Will Affect Individuals
Most changes in this area are covered in our Budget video above. If after watching that, you still have questions - here is some further detail:
- Personal Tax Allowance is set to be increased to £11,500. This is the new earnings amount which the government won't tax you on, anything above - they will.
- Transferable Allowances have been increased to £1,150 between spouses, providing the recipient has spare personal tax allowance and the other is a basic rate tax payer.
- The Higher Rate Tax bracket of 40% has been increased to those earning above £45,000 in the UK, and £43,000.
- Duty on Wine, Beer, Spirits, Alcohol Duty is set to increase, along with an increase on Tobacco Duty.
- The Tax Free Dividend Allowance of £5000 is set to be reduced to £2000.
- The Money Purchase Allowance has been reduced to £4000, in order to allow pension savers to access their savings while preventing double pension relief.
- Tax Free Childcare has been introduced meaning that eligible families will receive an extra 20% towards childcare. The former Childcare Voucher will be scrapped, which allowed users to pay for childcare pre tax. You must be earning £115pw (each if you are in a couple) and have a household income of no more than £100,000. The scheme is available to children up to the age of 12 (17 if the child is disabled).
New Savings Accounts
- NS&I Investment Bond: Available to anyone over the age of 16 with a minimum deposit of £100 and a maximum deposit of £3000. The interest rate is 2.2% and the bond is available for 1 year.
- Lifetime ISA: Available for anyone aged 18 - 40, and money can be deposited up until they turn 50. Up to £4,000 can be saved each year, with a government bonus of 25% - up to £1000 a year. The money can only be used to buy a first time home, or be kept until you are 60 years old. If the money is withdrawn before you turn 60 for any other reason than buying a first home, you will lose any government bonus you have acquired and pay a 25% charge.
Business Tax Changes
- The amount of Corporation Tax Limited companies must pay on their annual profits is set to decrease to 19%, then again to 17% by 2020.
- CANCELLED NIC Increase: The Government made a massive U-turn on the proposed increase to National Insurance Contributions for the Self Employed. This change has since been cancelled.
- Making Tax Digital: The Government have deferred their plans to make tax digital for businesses, self employed and landlords until 2019. This applies to those who have an income that is less than the VAT Threshold (which is also changing - see below!).
- VAT Registration & De-registrations: The VAT Threshold for businesses, self employed and landlords is increasing to £85,000. Once your income is above this figure, you will have to register. Once registered for VAT, you can de-register only when your income falls below £83,000. Both figures have increased by £2000.
- Business Rates Re-Evaluation: Many Business Owners were unhappy that Business Rates in England had increased. Business Rates are similar to Council Tax, but for Business Premises.
In light of this backlash, The Chancellor has introduced a £300m relief fund for local authorities to provide an element of discretional relief and put forward 2 further specific measures:
- Small Businesses that will lose rates relief will have their annual rates capped at the higher £600 or the transitional relief cap.
- Small Pubs will benefit from a fixed £1000 business rate discount available for 1 year, providing their rateable value is below £100,000.
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