So Spreadsheet Phil has just delivered his “last” Spring budget (which in future will always be in autumn – so another budget later this year which will make 3 budgets within 12 months !)
He did try to crack a few jokes, mainly at the expense of the labour party. It was noticeable that all the front bench were wearing their blue ties to show their political allegiance.
He repeated the government line that the deficit is going to take even longer to eliminate – now expected to be half way through the next parliament (assuming no earlier election) – do you remember Boy George (Osborne) promising this would happen by 2015 ?
These highlights below are subject to the small print being issued by the government in the red book, which is actually smaller than in previous years (only 64 pages).
So what’s in it for you ?
1) He repeated his November budget statement that next tax year the Personal Allowance (the amount you earn before paying tax) will increase from the current £11,000 to £11,500 – but we knew that already !
2) He also repeated his November budget statement of his intention to raise this to £12,500 “by the end of this Parliament” (which will be in 2020) – but we knew that already !
3) He also repeated his November budget statement of his intention to raise the higher rate threshold (the amount where you start paying the higher rate of income tax) to £50,000, again by the end of this Parliament – but we knew that already !.
4) He also repeated his November budget statement of his commitment to a new Bond next month which will pay 2.2% gross for 3 years, with a maximum investment of £3,000 – but we knew that already !
5) For those with rental income (gross income below £85,000), the introduction of quarterly digital reporting has been delayed by one year to April 2019.
6) The maximum limit for ISAs will rise to £20,000 in April.
7) And if you think your income tax bill is high, he mentioned that the top 1% of the population pay 27% of all income tax.
8) Nothing major to report.
9) No mention of changes to IR35 in April, but also no mention of extending this to the private sector (yet !)
Your Self Employment
10) As expected, there will be some increase in national insurance, but actually not as bad as we expected. The Class 4 national insurance will increase by 1% to 10% in April 2018, and a further 1% increase to 11% in April 2019. he then admitted this would raise £145 million by 2022, which is not a lot in macro terms.
11) This increase in Class 4 national insurance is partly to offset Boy George’s abolition of Class 2 national insurance in 2018 which Spreadsheet Phil said would adversely affect public finances, at which time the camera switched to Boy George (Osborne) on the bank benches who gave a wry smile).
12) Ummm – just out of interest do you remember the government’s manifesto commitment not to increase income tax, VAT or national insurance ?
13) For those with gross income below the VAT threshold of £85,000, the introduction of quarterly digital reporting has been delayed by one year to April 2019.
14) He confirmed corporation tax will come down to 17% by the end of this Parliament – but again we already knew that.
15) He will change the tax-free dividend allowance of £5,000 to £2,000 from April 2018.
With the well-publicised increase in business rates, he has given a discount of £1,000 to pubs – and an increase in alcohol duty in line with RPI inflation from 13 March (beer up 2p; bottle of gin up 34p) – so let’s all go for a drink before this date !