Chancellor Philip Hammond said he’d take a “balanced approach” to his second Budget of 2017.
Once again the speech was light on headline-grabbing finance changes and there were no ‘giveaways’ or major surprises.
Instead, the chancellor focussed on measures to prepare the economy for post-Brexit life.
Raising productivity is key to boosting economic growth and wages, but growth has “remained stubbornly flat” and continues to be an issue.
In light of this, the Office for Budget Responsibility revised down its forecasts for growth.
It expects GDP to grow by 1.5% in 2017 (down from 2% predicted at the Spring Budget in March) and 1.4% in 2018 (down from 1.6%).
To help address the problem, the National Productivity Investment Fund, which supports innovation and infrastructure, will be extended by a year and expanded to more than £31bn.
The chancellor also announced a range of investments, including:
- £3bn over 2 years to prepare for Brexit
- £30m to develop digital skill distance learning courses
- funding to support building 300,000 new homes a year by the mid-2020s
Significant announcements for businesses include the VAT thresholds remaining unchanged for 2 years, while business rates will increase using the CPI measure of inflation from April 2018.
For individuals, stamp duty has been abolished for most first-time buyers while increases to the personal allowance and the national living and minimum wage will be welcomed by many.
This report summarises the announcements made by Hammond during Autumn Budget 2017 on 22 November 2017.
However, these are subject to change following the Finance Bill and the Spring Statement.
Budget 2017 At A Glance
Increases to be determined by CPI, not RPI, from April 2018.
Businesses can have their original bill reinstated and backdated.
R&D Expenditure Credits
R&D expenditure credit rises to 12% from 1st January 2018.
Second devolution deal for the West Midlands.
Six metro mayors to share half of the £1.7bn transport fund.
Basic rate threshold rises to £11,850, higher rate up to £46,350.
National Living Wage
Increase of 4.4% brings NLW to £7.83 an hour for over-25s.
Pension Lifetime Allowance
To rise to £1.03m for 2018/19 tax year.
Threshold to remain at £85,000 for 2 years from April 2018.
All online marketplaces are jointly and severally liable for unpaid VAT of their sellers.
Abolished for first-time buyers on all homes worth up to £300,000.
Tax for diesel cars that fail to meet latest standards rise a band.
Cigarettes And Alcohol
Tobacco rises by 2% above RPI; 'white ciders' face new duty.
Investment limit to double to £2m for knowledge-led companies.
Capital Gains Indexation Allowance
Indexation for companies no longer calculated up to month of disposal
Company Van Benefit
To be increased from £3,230 to £3,350 from 6th April, 2018.
The way in which tax changes (or tax relief, as appropriate) are applied depends upon individual circumstances and may be subject to change in the future. The information in this report is based upon our understanding of the 2017 Autumn Budget, in respect of which specific implementation details may change when the final legislation and supporting documentation are published.
This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. You should not make any investment decisions based upon its content.
Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up to date, no warranty is given as to the accuracy or completeness of any information.
Contact Elpizo Accountants with any queries you many have regarding Budget Report 2017.