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Budget 2017 - The Chancellor’s first and last Spring Budget

The Chancellor, Philip Hammond, delivered his first Budget speech against a backdrop of Brexit uncertainty.

As part of a fiscally-tight Budget, the Chancellor decided to target company owners and investors in a bid to raise billions of pounds and provide a “strong and stable platform” for the UK Government’s negotiations as it navigates a path away from the EU.

He also proposed to enhance the fairness in the UK’s tax system with a view to transforming the economy into one that works for everyone.

 

The key points from his speech are summarised below:

 

The economy

  • The economy grew 1.8% in real terms in 2016, second only to Germany among major advanced economies
  • The current account deficit remains large by international and historical standards, widening to 4.9% of GDP in the first three quarters of 2016
  • The forecast for GDP growth in 2017 has increased by 0.6% to 2.0%

 

Personal tax

  • As previously announced, the tax-free personal allowance will increase to £11,500 on 6 April 2017 with the higher rate threshold increasing to £45,000 at the same time. (In Scotland, it is £43,000 for earned income.)
  • The tax-free Dividend Allowance will reduce from £5,000 to £2,000 in April 2018

 


Pensions

  • Following consultation, the government has confirmed that it will reduce the money purchase annual allowance to £4,000 from April 2017
  • The government is carrying out the first statutory review of the?State Pension age before publishing its review by 7 May 2017
  • Qualifying recognised overseas pension schemes (QROPS): The government will introduce a 25% charge on transfers to QROPS. Exceptions will apply to this charge (allowing transfers to be made tax-free) where people have a genuine need to transfer their pension, including when the individual and the pension are both located within the European Economic Area

 

Savings

  • It is confirmed that a NS&I bond paying interest of 2.2% over three years will be available from April 2017, on savings from £100 up to £3,000

 

Vehicle Excise Duty

  • From 1 April 2017, rates for cars, vans and motorcycles registered before April 2017 will increase by Retail Prices Index (RPI).

 

Indirect taxes

  • From 13 March 2017, the duty rates on beer, cider, wine and spirits will increase by RPI inflation
  • Duty rates on all tobacco products increased by 2% above RPI inflation from 6pm on 8 March 2017. In addition, the government will introduce a Minimum Excise Tax for cigarettes from 20 May 2017. The rate will be set at £268.63 per 1,000 cigarettes

 

Tax Tables 2017/18

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Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority.