A summary of the 2017 Autumn Budget

Spring Budget

Chancellor Philip Hammond has today delivered his second budget, he began by saying; “The economy continues to grow, create more jobs than ever before and continues to confound those who talk it down.”

He said that this budgets resolves to “look forward and not backwards.”

Here are the main points:

Taxation & Pay:

  • Tax free personal allowance to rise to £11,850 in April 2018
  • Higher rate income tax threshold to rise to £46,350
  • The National Living Wage will increase by 4.4% to £7.83 an hour from April 2018
  • Short haul air passenger duty rates and long haul economy rates to be frozen, paid for by an increase on premium class tickets and on private jets

Business:

  • Corporation Tax will be cut to 17% by 2020
  • VAT threshold for small businesses to remain at £85,000 for two years
  • A reminder that Tax free dividend allowance will be reduced from £5,000 to £2,000 from April 2018
  • £500m for 5G mobile networks, fibre broadband and artificial intelligence
  • £540m to support the growth of electric cars, including more charging points
  • A further 2.3bn allocated for R&D
  • Rises in business rates to be measures against CPI (Consumer Price Index) and not RPI (Retail Price Index)

The State of the Economy:

  • Growth forecast for 2017 downgraded from 2% to 1.5%
  • GDP downgraded to 1.4%, 1.3% and 1.5% in subsequent years before rising to 1.6% in 2021-22
  • Annual rate of CPI inflation forecast to fall from a peak of 3% to 2% later this year
  • Another 600,000 people forecast to be in work by 2022

Transport/Infrastructure/Regions:

  • £320m to be invested in former Redcar steelworks site
  • Second devolution deal for West Midlands
  • £1.7bn transport fund for city regions
  • £2bn for Scottish government, £1.2bn for Welsh government and £650m for Northern Ireland

Fuel:

  • Vehicle excise duty for diesel cars that do not meet latest standards to rise by one band in April 2018
  • Tax hike will not apply to van owners
  • Existing diesel supplement in company car tax to rise by 1%
  • Proceeds to fund a new £220m clean air fund
  • Fuel duty rise for petrol and diesel cars scheduled for April 2018 scrapped

Housing:

  • Stamp duty to be abolished immediately for first time buyers purchasing properties worth £300,000
  • 80% of all first time buyers will not pay stamp duty
  • Long term goal to build 300,000 homes a year by the mid 2020s
  • Compulsory purchase of land banked by developers for financial reasons
  • Reviews into delays in permitted developments going forward
  • New homelessness task force

Public Borrowing/deficit/spending:

  • Annual borrowing £49.9bn this year, £8.4bn lower than forecast in March
  • Borrowing forecast to fall in every subsequent year from £39.5bn in 2018-19 to £25.6bn in 2022-23
  • Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.4% this year
  • Debt will peak at 86.5% of GDP this year, then fall to 86.4% next year reaching 79.1% in 2022-23

Pensions, Savings and Welfare:

  • £1.5bn package to “address concerns” about Universal Credit
  • Pensions and savings regime left largely untouched
  • The lifetime allowance for pensions is to increase in line with CPI, rising to £1,030,000 for 2018/19

Health and Social Care:

  • £2.8bn in extra funding for the NHS England
  • £350m immediately to address pressures this winter, £1.6bn for 2018-19 and the remainder in 2019-20
  • £10bn capital investment fund for hospitals

If you have any questions on how the Autumn Budget will affect you get in touch or call 0161 249 5040