8th March 2017
Personal Taxation
- The main rate of National Insurance contributions for the self-employed to increase from 9% to 10% in April 2018 and 11% in April 2019
- The Class 4 rate is levied on profits of more than £8,060 a year
- The increases, which will apply to earnings below £43,000, will raise £145m a year by 2021-22 at an average cost of 60p a week to those affected. All Class 4 earnings above £43,000 will be taxed at 2%
- Class 2 National Insurance, a separate flat rate contribution paid by self-employed workers making a profit of more than £5,965 a year, is to be scrapped as planned in April 2018
- No changes to National Insurance paid by the employed and employers or to income tax or VAT
- Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020
Business
- £435m for firms affected by increases in business rates, including £300m hardship fund for worst hit
- Pubs with rateable value of less than £100,000 to get a £1,000 discount on rates they would have paid
- Rate rises for businesses losing existing relief will be capped at £50 a month
- A tax avoidance clampdown totalling £820m to include action to stop businesses converting capital losses into trading losses and introduction of UK VAT on roaming telecoms services outside the EU
- Review of taxation of North Sea oil producers
The state of the economy
- UK second-fastest growing economy in the G7 in 2016
- Growth forecast for 2017 upgraded from 1.4% to 2%
- But GDP downgraded to 1.6%, 1.7%, 1.9% in subsequent years, then 2% in 2021-22
- Annual rate of inflation forecast to rise from 2.3% to 2.4% in 2017-18 before falling to 2.3% and 2.0% in subsequent years
- A further 650,000 people expected to be in employment by 2021
Public borrowing/deficit/spending
- Annual borrowing £51.7bn in 2016-17, £16.4bn lower than forecast
- Borrowing forecast to total £58.3bn in 2017-18, £40.6bn in 2018-19, £21.4bn in 2019-20 and £20.6bn in 2020-21
- Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.6% this year, then 2.9%, 1.9%, 1% and 0.9% in subsequent years, reaching 0.7% in 2021-22. But borrowing still predicted to be £100bn higher by 2020 than forecast in March 2016
- Debt rose to 86.6% this year, but will fall to 79.8% in 2021-22