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The Spring Budget

The Spring Budget has highlighted the Government’s commitment to building a strong economy while investing in infrastructure, education and life-long learning, and protecting the NHS.

The Office for Budget Responsibility forecast that the UK economy will grow by 2% in 2017, slowing down in 2018, and then picking up to 2% again in 2021.

From a tax perspective, emphasis was placed upon tax avoidance and evasion, and the often-perceived imbalance in the tax system between the employed and self-employed tax rates. An example for the latter was the announcement that national insurance contributions for the self-employed will rise from 9% to 10% in April 2018 and to 11% in April 2019, while the tax-free dividend allowance will be reduced from £5,000 to £2,000 from April 2018.

The budget included strong business-focused plans to ‘make Britain the most attractive place to start and grow a business’.

The measures included plans to:

  • reduce difficulties related to the R&D tax credit regime
  • delay quarterly reporting required under ‘Making Tax Digital’ will be delayed by a year for those companies who have a turnover below the VAT registration threshold
  • cut the corporation tax rate to 19% from this April and 17% in 2020
  • provide a package of measures to help smaller businesses cope with business rate rises.

MTD Spring budget