What’s in store for the UK economy? Now that “Spreadsheet Phil” has presented his latest forecast and plans to Parliament, we summarise the main points in the 2017 Budget.
With growth, productivity and GDP all forecasted to be lower than expected and significant uncertainty still surrounding Brexit, the Chancellor didn’t have much room for manoeuver.
Before the announcement, Mr Hammond indicated that he would use any available funds to “secure a bright future for Britain”. So how well has he done?
Here’s a summary of some of the main points:
- £3bn is to be set aside over the next two years to prepare the UK for all possible Brexit scenarios.
- Stamp duty is abolished immediately for first-time buyers buying properties up to £300,000 or the first £300,000 on properties up to £500,000.
- From April 2018, personal allowance will be increased to £11,850 and the higher rate threshold to £46,350.
- The National Living Wage will rise in April 2018 from £7.50 per hour to £7.83 (4.4%).
- The Chancellor has confirmed that the VAT threshold will not be reduced from £85,000 but it is being frozen at that level for the next two years.
- There’s £500m of government funding for 5G mobile networks, fibre broadband and AI and £540m to support electric cars, including more charging points. People charging their electric cars at work will not face a Benefit in Kind charge.
- A further £2.3bn has been allocated for investment in R&D and the main R&D Tax Credit will be increased to 12%.
- Business rate rises will be pegged to CPI rather than the higher RPI.
Commenting on the news about VAT, Wendy Rowe, Commercial Director, Wolters Kluwer Tax & Accounting said: “The Chancellor has confirmed that major reductions in the VAT threshold, mooted by the Office of Tax Simplification, will not be implemented. Tens of thousands of small businesses who might have found themselves brought under MTD will no doubt be relieved to hear this.”
Claire Carter, Managing Director of Wolters Kluwer Tax and Accounting, a recent finalist in the Women in IT Excellence Awards hosted by Computing magazine, highlighted the importance of Science, Technology, Engineering and Maths (STEM) in schools to the long-term development of the economy. “I’m pleased to see that 8,000 new computer science teachers are to be recruited and that schools will receive extra funding for pupils taking maths. Forward-thinking, high-tech companies like Wolters Kluwer rely on a steady supply of talented and trained individuals to help us build the future for our customers and their clients.”