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SPRING STATEMENT REVIEW
A round up of the things that may affect you following
the speech given by The Chancellor of the Exchequer,
Phillip Hammond, to parliament this Spring Statement...
» » AS THE COUNTRY PREPARES
for Brexit, the Chancellor
acknowledged in his speech
that “too many families are
feeling the squeeze”.
He said inflation would
reach 2.4% in 2017 – higher
than the Bank of England’s
long-term target of 2% – before
falling back to 2.3% in 2018 and
2% in 2019.
He expects wage rises to
outstrip inflation during
this period, although many
households who rely on
savings interest and benefits
will be anxious about the
impact of rising prices on their
family finances.
CHANGES TO TAX
As previously announced,
the income tax personal
allowance will rise to £11,500
in April, with the higher rate
threshold rising to £45,000.
The personal allowance is
scheduled to rise to £12,500,
and the higher rate threshold
to £50,000, by the end of this
parliament in 2020.
It was announced that there
would be a tax increase for
the self-employed. National
Insurance Contributions –
simply another type of tax
we all pay – will increase for
self-employed individuals
from April next year said the
Chancellor. It was said that this
would happen when Class 2
NICs are abolished in 2018 and
Class 4 NICs increase from 9%
to 10%. They will rise to 11% in
2019. However, this proposal
was overturned by the Prime
Minister less than a week
later.
Furthermore, in a bid to
‘enhance the fairness of the
system’, Hammond has called
for further push to penalise
professionals who avoid tax.
SHAREHOLDERS
Director shareholders will
see a tax break reduced on the
dividends they receive. Tax
free dividend allowance will be
reduced from £5000 to £2000
from April 2018. Affecting
those who own a small
business and people with large
portfolios of shares.
EDUCATION AND CAREERS
The Chancellor said that
perhaps the most important
thing government can do
is to invest in the future.
Invest so our children and
grandchildren can make the
most of the opportunities
which present themselves.
He said this begins by
addressing the skills gap.
Giving every child the
opportunity to go to a
good school regardless of
background. This will be done
by investing in education and
skills, which in turn will help
close our productivity gap and
deliver greater prosperity.
This holds the key to
inclusive growth, which will
see an economy that works for
everyone said the Chancellor.
Due to the prevalent skills
gap the Chancellor discussed
the fear for the next generation,
posing the key question, will
our children enjoy the same
opportunities we did?
He went on the ensure
this doubt ends with the
introduction of T-Levels –
technical qualifications, an
alternative to A-levels – for 16-
to 19-year-olds.
T- levels will see a clearer
system qualifications devoted
to supporting our young adults
into quality jobs, helping them
gain world- class skills. One
that replaces the 13,000 or so,
different qualifications, with
just 15 clear, career-focused
routes.
Hammond said, once this
programme is fully rolled
out, we will be investing an
additional £500m a year in our
16-19 year olds.
Increasing by over 50% the
number of hours training
for 16-19-year-old technical
students, including a high-
quality 3-month work
placement for every student,
so when they qualify, they are
genuinely “work-ready”.
DRIVING
As of April 2017, Vehicle
Excise Duty (VED) rates for
cars, vans and motorcycles
registered before April 2017
will increase by the Retail
Prices Index (RPI).
Road User Levy rates and
Heavy Goods Vehicle VED
rates will be frozen from April
2017.
The government is
looking to work with the
industry to update the levy,
so hauliers that plan their
routes efficiently will be
rewarded. This is with the
aim of improving air quality
and efficient use of the UK’s
roads.
The government will
continue to invest to support
the development