Spring Budget 2017 breakdown
** Please note this Spring Budget 2017 breakdown article was published before the Chancellor actioned a U-Turn on the planned change for National Insurance contributions for the self-employed. As such, we have removed reference to these changes which were previously published.**
Last week’s Spring Budget 2017 breakdown seems to have been largely overshadowed with this week’s news that Theresa May will action Article 50 imminently and Nicola Sturgeon pushing forward for a second Scottish referendum. 2017 has so far been largely hit by political uncertainty with the election of Trump and the ambiguity around Brexit, however one thing we can all rely on is the pantomime of the Chancellor’s budget announcements.
So what were the main points in Hammond’s first Spring Budget and what does it actually mean in ‘real’ terms? The Self-Employed and sugary drinks consumers seem to have been ‘targeted’, social care and education are the main benefactors. There were no real surprises and it remains to be seen how many of his amendments will pan out.
In summary:
Earnings
- Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020
Savings
- Reduction in tax-free allowance on share dividends from £5,000 to £2,000. This measure which will affect small business owners and investors will come into force in April 2018.
This will affect mainly those who own a small business and pay themselves dividends as well as a small salary. It will also affect those with large portfolios of shares. However if you are making the most of your ISA allowance, you shouldn’t be worried.
- The previously announced Lifetime Individual Savings Account(LISA) for those aged between 18 and 40. They can save up to £4,000 a year, and the government will add a 25% bonus if the money is used to buy a home or as a pension from the age of 60
- The amount that can be saved in a tax-free Individual Savings Account (Isa) is rising from £15,240 a year to £20,000, as previously announced.
There wasn’t really anything to report on pensions, other than a crackdown on overseas pension abuse. What these measures will look like is still up for debate.
Mortgages
- Many buy-to-let landlords will see the amount of tax relief that they can claim on mortgage interest payments cut over the course of four years from April. They will only be able to claim at the lower rate of tax, not the higher.
If you have any questions or concerns on how Spring Budget 2017 breakdown may affect your financial portfolio, to speak with one of our independent financial advisers please email [email protected] or contact us on 01273 208813 and one of our Financial Advisers will be in touch.
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