Budget 2017: At a glance
Chancellor Philip Hammond said the Government was building the foundations of a “stronger, fairer, more global Britain” and today’s Budget provides a “strong, stable” platform for Brexit negotiations.
The state of the economy
The Office for Budget Responsibility (OBR) has raised its economic growth forecasts for this year, expecting the UK economy to grow 2% rather than 1.4%.
In 2018 growth is forecast to slow to 1.6%, then in subsequent years 1.7%, 1.9%, and back to 2% in 2021.
Inflation is forecast to hit 2.4% this year, falling to 2.3% in 2018 and 2% in 2019. Unemployment is at 11 year low.
Annual borrowing – OBR forecasts:
UK debt rose to 86.6% this year, expected to peak at 88.8% next year but will fall to 79.8% in 2021-22.
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.
Real wages continue to rise in every year of forecast.
NI contributions will rise for the self-employed by 1% to 10% from April next year, rising again to 11% in 2019.
Tax-free dividend allowance for directors/shareholders will drop from £5,000 to £2,000 from April 2018.
Details on how Chancellor intends to help businesses:
– Corporation Tax will fall to 19% from April and 17% by 2020.
– The Chancellor also announced a reduction in the red tape surrounding the R&D tax regime.
Business Rates: Tax brings in £25bn a year; trio of measures unveiled:
– Any growing business exiting small business rates relief will pay no more than £50 more a month in business rates– Pubs with a rateable value lower than £100,000 which will receive a £1,000 annual discount.-
– £300m fund for local authorities to use for “discretionary relief” for business rates in “special hardship cases”.
– Transport spending of £90m for the North; £23m for the Midlands
– £270m for new technologies, £16m for 5G mobile technology and £200m for local broadband networks
– New minimum excise duty on cigarettes based on a pack price of £7.35 introduced.
– No increases in alcohol or tobacco duties on top of those previously announced.
– Vehicle excise duty rates for hauliers and the HGV Road User Levy frozen for another year