The government is looking to reintroduce its plan to reduce the tax-free dividend allowance from £5,000 to £2,000.
The Spring Budget 2017 delivered by Chancellor Philip Hammond has been described as a budget to:- “take forward our plan to prepare Britain for a brighter future”.
The economic predictions made in the Autumn Statement last year were similar to those given by the Office for Budget Responsibility (OBR).
It is predicted that inflation will rise by 2.4% this year, 2.3% in 2018 and 2% the year after that.
UK Growth is expected to be 2% this year (this figure has been revised upwards from the 1.4% forecast given in the Autumn Statement last year) and growth is expected to be 1.6% the year after.
The level of borrowing for 2016/17 is predicted to be £51.7 billion (This is £16.4 billion lower than was thought in the Autumn Statement last year) and public sector net borrowing is expected to fall from the 3.8% of Gross Domestic Product (GDP) last year to 2.6% in 2017.
This year’s Spring Budget 2017 had a few new measures, but most of the announcements only come into effect next year.
It was confirmed by the Chancellor that from April this year:
- there will be a rise in the national living wage to £7.50/hour
- there will be a rise in the personal allowance to £11,500 and the threshold for paying higher rate tax rose to £45,000 (£43,000 in Scotland)
- a new NS&I bond was introduced which pays savers a rate of 2.2% on deposits of up to £3,000.
A summary of the main features of the Spring Budget report 2017 is given below.
In this month’s managing your money Altrincham, we take a look at:
- A new personal savings allowance will allow individuals to earn up to £1,000 a year in interest tax-free.
The 10% dividend tax credit has been replaced by a £5,000 annual allowance.
- The eligibility criteria for the new state pension could mean that thousands of people are not eligible for the full amount.
A new lifetime ISA.