Main points at a glance for businesses with effect from April 2018.
- The tax free personal allowance increases to £11850 in line with inflation from April 2018
- The higher rate threshold increases to £46,350
- The National Living Wage increases from £7.50 to £7.83 per hour
- The NI threshold before 12% NI starts to be deducted from each source of earned income is increased from £680 to £702 pcm – this is the salary many owner-director pay themselves
- The tax free dividend allowance is reduced from £5,000 to £2,000.
- VAT threshold for small business to remain at £85,000 for two years
- Rates will rise in line with the lower Consumer Prices Index (CPI) measure of inflation, not the Retail Prices Index (RPI) bringing forward the cut to rate rises by 2 years
- The government will carefully consult on how to tackle IR35 non-compliance in the private sector, drawing on the experience of the public sector reforms, including through external research already commissioned by the government and due to be published in 2018.
- The growth forecast for 2017 is revised to 1.5% down from 2% in March 17