This is the last spring budget to be delivered by a UK Chancellor.
Forecasts for the UK economy included:
- Inflation rate expected to rise to 2.4% this year, to 2.3% in 2018 and to 2% by 2019.
- OBR has forecast growth of 2% this year, which is second only to Germany, then downgraded to 1.6%, 1.7%, and 1.9% between 2018 and 2021, returning to 2% in 2022.
- Public borrowing now revised downwards to £51.7 billion in 2016-2017, and £58.3 billion in the following year, falling to £20.6 billion in 2020.21.
- The national debt as a share of GDP, is expected be 86.6%% by 2016/17, down to 79.8% by 2021-2022.
- Employment set to grow year on year.
Measures announced by the Chancellor:
Social care crisis
Councils to be given £2 billion additional grants to deal with increased demand for social care, and ease pressure on the NHS.
- Educational reform is a top priority for the government. To help close productivity gap, further support for skills development announced, with a commitment to fund 110 new free schools, some specialising in mathematics.
- Introduction of T-Levels (technical-levels) with just 15 clear routes to employment.
Chancellor acknowledged that business rate revaluation has created problems, and looked to address this by an additional cap on rates for small business, together with relief for pubs, amounting to £435m support.
Is planned to fall to 19% this year, and to 17% by 2020, which, in the Chancellor’s words, gives the UK the most attractive corporate tax regime in the G7.
Tax relief on dividend payments
Tax relief for dividend payments to shareholders to fall from £5000 to £2000 in 2018.
Science and innovation
Investment of £300m in STEM (science, technology, engineering and mathematics) subjects and new technologies.
To rise to £11,500 (with commitment to increase this to £12,500.)
40p income tax threshold
To rise to £45,000.
- A greater push on tax avoidance, evasion and non-compliance by UK businesses. Tough new penalties for tax advisers found guilty of assisting companies to evade their taxes.
National insurance contributions (NICS) – self-employed workers to be brought into line with the employed, with NICS increasing from 9% to 10% in April 2018. (Note, planned changes to National Insurance were scrapped just a week after the budget, on March 15th 2017)
- National Living Wage to rise to £7.50 per hour in April 2017.
Tougher consumer law
The Chancellor acknowledged that markets fail, and announced that there will be schemes to improve the level of consumer protection, especially in terms of clearer terms and conditions.
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