Will you be better or worse off as a result of today’s Budget? Our summary will tell you, read on to find out.
Some small business owners
It was positive news for small businesses owners, with the introduction of business rate cap of no more than £50 per month for those leaving the small business rate relief tax.
Don’t get too excited though, many small business owners will be hit by rises in National Insurance contributions if they are self-employed and the cut to the tax-free dividend allowance if they work through a limited company.
Landlords and ladies who run pubs with a rateable value of less that £100,000, will be toasting the £1,000 business rate discount announced today for pubs.
Coupled with no increases in alcohol or tobacco duties, it’s a win-win for those in the licensing trade.
Working parents will benefit from an additional £2,000 from September this year with the introduction of the new tax-free childcare policy.
Parents with children between three and four years of age will be eligible for 30 hours of free childcare.
The government also continue to encourage more mothers back into the workplace, as they announced funding of £5m to support people returning to work after a career break.
Education (depending on your point of view)
Free school transport will be extended to all children on free school meals, who attend selective schools.
There will also be an investment of £216 million to repair and rebuild schools.
Technical students aged 16 to 19 were assured that they would leave school/college work-ready with an increase of 50% in the number of hours training, as well as a guaranteed three-month work placement.
A much-needed cash injection of £2 billion for social care in England over the next three years will enable local authorities to create new care packages and respond better to the needs of our aging population.
Mr Hammond also announced that the government would publish a Green Paper later in the year to consider the best long-term solution for meeting the cost of social care.
From April, a new National Savings & Investments (NS&I) Bond paying 2.2% gross per annum will be available.
Don’t get too excited though, savers will only be able to deposit a maximum of £3,000.
There was bad news for savers and those people on fixed incomes; see below for more information.
Class 4 National Insurance for self-employed workers will increase by 1% to 10% in April 2018 and to 11% in 2019.
People working through limited companies and investors
Mr Hammond’s predecessor, George Osborne announced changes to the way people working through limited companies and investors holding shares would be taxed.
He introduced an annual £5,000 tax-free dividend allowance, with dividends above that level taxed at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.
For most people working through a limited company this increased their tax bill.
Today, Mr Hammond announced that the tax-free dividend allowance will be cut by £3,000, to £2,000, in April 2018.
Savers and people on fixed incomes
Mr Hammond revealed that inflation is expected to peak at 2.4% this year, whilst staying above the Bank of England’s 2% target for some time to come.
If the figure for 2017 is correct, it will mean most savers seeing a real term loss on their capital, with inflation outstripping the interest they receive.
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