The Spring Budget 2017 is intended for tax practitioners and with those interests in tax policy changes like business owners and consultants. Therefore, it is important to know all the details on all tax measures to keep you informed with the latest news. We presented some of the facts included in this year’s Spring Budget.
1. Economic Forecast
The Chancellor presented that the growth in the UK economy has picked up through 2016. The employment has reach a record high of 31.8 million people. It was also stated that the UK economy will grow by 2% in 2017. The Office for Budget Responsibility (OBR) forecasts that the economy will also grow at a slightly slower rate in 2018, before picking up to 2% in 2021.
2. New ways to protect consumers
The government will start investigating on ways to protect the consumers which includes preventing them from being charged automatically without notice whenever a subscription is renewed or a free trial expires. The government also wants to make the terms and conditions simpler and clearer including the digital contracts so that consumers can fully understand the contract terms.
3. New strategy to make UK a world leader when it comes to 5G technology
A £16 million budget was released for a national 5G Innovation Network to trial the new 5G technology. Also, a £200 million budget for local projects for building a fast and reliable full-fibre broadband networks. This can greatly benefit business owners who work with the help of the Internet.
4. An extra year will be provided for small businesses and landlords under the VAT threshold to prepare for Making Tax Digital (MTD)
Unincorporated businesses, or those businesses owned privately by one or more persons that is currently having an annual turnover below the VAT registration threshold will have another year to prepare before the MTD becomes mandatory. Under this MTD, businesses will now use digital software for keeping tax records and for updating HMRC quarterly. The government released a deadline which will be on April 2018.
5. Increase in the main rate of National Insurance contributions (NICs) for the self-employed
By 2018, the abolishing of Class 2 NICs will be implemented. Class 4 NICs will rise to 10% in April 2018 and to 11% in April 2019. Taken into account these changes, those freelancers/self-employed with profits above £16,250 will have to pay more. With this, there will be a small difference in the contributions between self-employed and employed individuals.
Both employees and entrepreneurs should be able to know all these things in order for them to be updated with the current changes that will happen in the government. These are critical things that should always be kept in mind.
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