Spring Budget 2017 – video summary

Working towards “a stronger, fairer and better Britain”

The Office for Budget Responsibility’s forecast of robust growth gave Philip Hammond the opportunity for a more optimistic Spring Budget – the last to be held – than he might have expected. The Chancellor made the most of his situation with a confident, upbeat delivery that reaffirmed the Government’s commitment to building a strong economy while investing in infrastructure, education and life-long learning, and protecting the NHS. He also made the most of his position with humorous jibes at the Opposition.

From a tax perspective, speech highlights included a continued emphasis on the importance of collecting taxes that are due by tackling avoidance and evasion, even though Mr Hammond noted that the UK already has one of the lowest tax gaps in the world. Areas under the spotlight include the ability for businesses to convert capital losses into trading losses, which will be removed from Budget Day.

As anticipated, the Chancellor also addressed perceived unfairness in the tax system between the employed and self-employed, and those operating through company structures. For example, he announced that national insurance contributions for the self-employed will rise from 9% to 10% in April 2018 and to 11% in April 2019, while the tax-free dividend allowance will be reduced from £5,000 to £2,000 from April 2018.

The Chancellor declared his intent to “make Britain the most attractive place to start and grow a business”. His business-focused measures included plans to reduce administrative burdens associated with the R&D tax credit regime; confirmation that quarterly reporting under ‘Making Tax Digital’ would be delayed by a year for businesses with turnover below the VAT registration threshold; confirmation of the planned cut in the corporation tax rate to 19% from this April and 17% in 2020; and a package of measures to help smaller businesses cope with business rate rises.

Hammond seemed set on emphasising the positive and looking to the future. He made sure to include some crowd pleasers, such as confirmation of the intended increases in personal allowances by 2020, investment to encourage productivity and high-tech businesses, and additional funding for social care and a Midlands Engine Strategy. Building to a close to inspire his backbenchers, he emphasised the Government’s determination to build “a stronger, fairer and better Britain”.

Business tax
Employment taxes
HMRC powers and administration
Personal tax
Tax avoidance and fraud
Tax-efficient investment
VAT and indirect taxes