BUDGET – AT A GLANCE

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