08 March 2017
Budget 2017 in detail
On 8 March 2017 the Chancellor of the Exchequer, Philip Hammond, delivered his Budget.
"By investing in the future, the Budget helps make the most of the opportunities ahead by laying the foundations of a stronger, fairer, better Britain – a country that works for everyone"
The published HM Treasury ‘Budget 2017’ statement sets out the detail and this can be downloaded from the www.gov.uk website.
To help you understand the key points, HSBC has prepared a summary document outlining some of the changes which may impact you and your future financial plans.
In the Autumn Statement 2016, the Chancellor announced that the government will move to a single major fiscal event each year. This means that following this spring 2017 Budget statement, future Budgets will be delivered in the Autumn, with the first one taking place in Autumn 2017.
Some of the key highlights of the Budget 2017 include:
Individuals
- Tax free personal allowance, the point at which people start to pay income tax, will rise to £11,500 for the 2017-18 tax year. The threshold at which people pay higher rate income tax will rise from £43,000 to £45,000 from 6 April 2017 (except in Scotland where it remains at £43,000). It was announced that the government remains committed to increasing these thresholds to £12,500 and £50,000 (other than for Scotland) for the higher rate by the end of this parliament.
- If you pay basic rate income tax then capital gains tax is presently chargeable at 18% on your gains from residential property, and 10% on your gains from other chargeable assets for the 2017-18 tax year. If you are a higher or additional rate income tax payer then you’ll pay 28% and 20% respectively.
- Inheritance tax threshold is £325,000; this can be inherited by a surviving spouse or civil partner if not used on first death. New rules from April 2017 are being phased in over four years which will eventually put an individual’s threshold up to a maximum of £500,000 by the tax year 2020-21 where a main residence is left to direct descendants.
- National Living Wage is to rise from £7.20 per hour to £7.50 per hour from 1 April 2017.
- From April 2018 the main rate of class 4 National Insurance Contributions will increase from the current rate of 9% by 1%, to 10% in April 2018 and another 1%, to 11% in April 2019.
Click here for a summary of allowances/tax tables
Savings and Investing
- Dividend Allowance: There will be a reduction in the tax-free dividend allowance for shareholders from £5,000 to £2,000 from 6 April 2018.
- The Lifetime ISA: The previously announced Lifetime ISA (LISA) comes into force on 6 April 2017.
- ISA allowance: The annual ISA allowance for the 2017-18 tax year is £20,000.
- National Savings & Investments Bond: Further details were provided on the new three-year National Savings & Investment Bond that was announced in the Autumn Statement 2016. The bond will offer savers the ability to deposit between £100 and £3,000, and will be available to those aged 16 and over. The interest rate was confirmed as 2.2% gross AER over a term of 3 years and the Bond is available for 12 months from April 2017.
Other
- Insurance Premium Tax (IPT) was previously announced in the Autumn Statement 2016 as increasing from 10% to 12% from 1 June 2017.
- The Soft Drinks Industry Levy, often referred to as the ‘sugar tax’ was confirmed at 18p (sugar content of 5 grams or more per 100 ml) and 24p (sugar content of 8 grams or more 100 ml) a litre on the main and higher banks of soft drinks. £1bn from this tax will be invested in school projects.
- £2bn was announced for social care over the next three years.
Duty
- Fuel duty remains frozen with the main rate of fuel duty at 57.95 pence per litre.
- As previously announced, from 13 March, the duty rates on beer, cider, wine and spirits will increase by RPI inflation. As announced at Budget 2014, duty rates on all tobacco products will increase by 2% above RPI inflation with this change coming into effect from 6pm on 8 March 2017.
- A new minimum excise duty on cigarettes will be introduced. The rate will be set at £268.63 per 1,000 cigarettes and will be effective from 20 May 2017.
Reference documents
For further information please view the attachments below: