Budget 2018 Summary
Philip Hammond has delivered his first Budget as chancellor. These are the key points of what he has said.
Pensions and savings
- 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. All Class 4 earnings above £43,000 will continue to be taxed at 2% while those below £8,060 will pay nothing.
- Class 2 National Insurance, a separate flat rate contribution paid by self-employed workers making a profit of more than £5,965 a year, is to be scrapped as planned in April 2018
- Taken together, millions of self-employed workers could pay an average of £240 a year more but ministers say those earning £16,250 or less will pay less
- No changes to National Insurance paid by the employed and employers or to income tax or VAT
- Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020
- £435m for firms affected by increases in business rates, including £300m hardship fund for worst hit
- Pubs with rateable value of less than £100,000 to get a one-year £1,000 discount on rates they would have paid
- Rate rises for businesses losing existing relief will be capped at £50 a month
- A £820m tax avoidance clampdown, including action to stop businesses converting capital losses into trading losses and introduction of UK VAT on roaming telecoms services outside the EU
- Privately-owned SMEs to get extra year to prepare for tax digitisation and quarterly reporting
- Review of taxation of North Sea oil producers
Pensions and savings
- Reduction in tax-free allowance on share dividends from £5,000 to £2,000
- The measure, affecting small business owners and investors, will come into force in April 2018, raising £2.63bn by 2021-2022
- Dividend income paid on shares held in a stocks and shares ISA will remain tax free.
- Measures to tackle abuse of overseas pension schemes