The Chancellor, Philip Hammond, has announced his Spring Budget. Below is a summary of the key points relevant to our members:
Growth and public borrowing
The Office for Budget Responsibility’s (OBR) has revised up the expected growth of the British economy from 1.7% to 2% in 2017. However, it has revised down the figures for 2018, 2019 and 2020. In addition to this the OBR is expecting public borrowing to be lower in 2016/17-2021/22.
Health and social care spending
The Chancellor re-affirmed the Government’s commitment to NHS England’s Five Year Forward View. In addition to this he pledged an additional £100m fund for A&E in England. There will also be an additional £325m to support the implementation of the Sustainability and Transformation Plans (STP). The Secretary of State for Health, Jeremy Hunt, will make a further announcement on this. Hammond announced an additional £2bn for social care over the next three years for local authorities in England. This is aimed to help local authorities struggling to adequately fund social care and £1bn will be available in the next financial year. The Government will publish a Green Paper on social care later this year setting out its vision in greater detail.
A cap on increase of business rates at £50 a month for small business was announced. In addition to this local authorities will be given a £300m fund to deliver discretionary relief for
“individual hard cases”.
The small business relief rate is applicable to businesses where:
- The property’s rateable value is less than £12,000 (£15,000 from April 2017)
- From 1 April 2017 one won’t pay business rates on a property with a rateable value of £12,000 or less. For properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%
- It is also possible to qualify for small business rate relief if one has two or more properties.
However, none of the other properties must have a rateable value above £2,600 (£2,900 from
April 2017) and the total rateable value of all properties is less than £20,000 (£28,000 in London).
National Insurance Contribution increase for self-employed
The Chancellor announced an increase in the National Insurance Contributions (NIC) for selfemployed workers. The raise will be by 1% to 10% in total from April 2018 and to 11% in 2019.
In addition to this, it was announced that the Government will launch a consultation on taxation of benefits in kind this year.
Other announcements included:
- the Personal Tax Allowance will be increased to £11,500 for basic-rate taxpayers
- the National Living Wage will rise to £7.50 in April
- a consumer protection Green Paper will be published later this year
- the Government will publish its Midlands Engine document soon. This will set out the devolution agreement in the Midlands and is likely to be similar to what was agreed with Greater Manchester
- additional funds for the devolved nations was announced with Scotland receiving £350m, Wales £200m and Norther Ireland £120m
- increase in registration and deregistration thresholds from 1 April 2017. The VAT registration threshold will increase from £83,000 to £85,000 and the deregistration threshold from £81,000 to £83,000.
- £5m to promote ‘returnships’ to help people back into employment after a career break.
- The introduction of maintenance loans for part-time undergraduates.