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What does the Budget mean for you?

Spring Budget 2017 by Philip Hammond, the Chancellor of the Exchequer was relatively neutral with him introducing fewer new measures then we usually expect.

Where he did move from tradition tough is what is arguably a drift from the manifesto promise not to increasing National Insurance (NI) – though he tells us it is simply a clarification!

Class 4 National Insurance

Those hit will be the self employed who earn between £8,060 and £43,000. They will see their Class 4 NI contributions rise from 9% to 10% in April 2018 and 11% in April 2019. Meanwhile those earning below £8,060 will pay nothing and the rate for earnings above £43,000 will remain 2%.

Income Tax

As previously announced, the personal allowance will be raised to £11,500. The higher rate threshold is also to be increased this April to £45,000.

Corporation Tax

The rate will be reduced by 3% over three years. Firstly a cut from 20% to 19% from this April then down to 17% by April 2020.

VAT

The threshold for registration is to be increase from £83,00 to £85,000 in April 2017. Meanwhile the deregistration threshold will become £83,000 – up from £81,000.

Dividends

The tax free divided allowance will be cut from £5,000 to £2,000 in April 2018.

ISAs

The annual ISA allowance will increase to £20,000 from April 2017.

Lifestyle

There were also tax increases to be applied to alcohol and tobacco. Alcohol duty will rise in line with inflation while tobacco duty will rise by 2% above the Retail Price Index. The changes come in on 13th March and 8th March respectively.

There is some good news though with fuel duty having been frozen.

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