Budget 2017 Summary

The Budget on 8th March brought few surprises with Philip Hammond saying that it was a budget to support families without spending recklessly.  The self-employed are hardest hit with increases in National Insurance Contributions over the next 2 years – so much for encouraging entrepreneurship to boost the economy!

Torbay in particular is full of individuals working hard to create a job for themselves through self-employment, where otherwise they would be dependent on the state for benefits, in a local economy which is still very tough.   The additional 2% increase in their National Insurance Contributions over the next 2 years, and the implication that this is just the start of reforms to come, is going to hit the small business sole traders hard.  Link this to the changes in tax on dividends for shareholding directors, and it boils down to little encouragement for this sector of the working population.

head in hands image budget 2017

 Selection Of Key Points

  • Promise of further tax reforms for the self employed
  • £5,000 Dividend Tax Allowance reduced to £2,000 from April 2018.
  • National Living Wage to rise to £7.50 per hour from April 2017
  • Personal tax allowance to rise to £12,500 as planned by 2020
  • New “T levels” to promote technical training to be on a par with “A levels”.
  • Salary sacrifice schemes scrapped from April 2017 except for ultralow emission cars, pensions, childcare and cycle schemes

I am most passionate about these changes because most of my clients are small businesses who will be directly affected.  The mistaken viewpoint that self-employment is easy does not take into account the hours of hard slog required to build a business from scratch.

self employed image revell accounting

Final Thoughts

Philip Hammond says that the self-employed are now able to enjoy similar social security benefits to those who are employed, but I do not agree that it is now a level playing field.  The government should be encouraging the commitment and entrepreneurial spirit which is the backbone of many local economies, not putting more obstacles in their path.

 

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1st Floor, Hatton House, Bridge Road, Churston, Brixham, TQ5 0JL

 

Here Is The BBC’s Summary Of The 2017 Budget

Budget 2017 summary: Key points at-a-glance – BBC News

Philip Hammond has delivered his first Budget as chancellor. These are the key points of what he has said. The main rate of Class 4 National Insurance contributions for the self-employed to increase from 9% to 10% in April 2018 and 11% in April 2019 The increases, applying to earnings between £8,060 and £43,000, will raise £145m a year by 2021-22 at an average cost of 60p a week to those affected.

 

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1st Floor, Hatton House, Bridge Road, Churston, Brixham, TQ5 0JL

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