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Spring Budget 2017
The Chancellor delivered the 2017 Spring Budget on 8 March 2017. The Government announced that the employment rate reached a record high in the three months to December 2016 (74.6%) and unemployment is at an 11 year low. The Government used the Spring Budget to outline plans to help more people back into work, in addition to securing a highly skilled work force for the future of the economy.
Here are some of the key points of the Budget to be aware of:
- The Chancellor confirmed the rise to the National Living Wage which will come into force in April 2017. For more information on this please click here.
- The Government will be creating a £5m fund to support people returning to work after a career break.
- The personal tax free allowance will rise to £11,500 as planned, with the Government aiming to increase this to £12,500 by 2020.
- The Government’s tax free childcare policy will commence in April 2017. Working parents with children under the age of 12 can receive up to £2,000 in tax free contributions for child care costs. Further, working parents with children who are 3 or 4 years old can apply for an additional 15 hours of nursery vouchers, taking the total hours to 30 per week.
- The Government will publish its agenda for clearer reporting on the use of income tax relief for employees’ expenses on 20 March 2017.
- Reform of tax treatment of termination payments will form part of the Finance Bill 2017. The Government will aim to make all contractual and non-contractual payments in lieu of notice taxable in the same way as earnings. In addition, the first £30,000 of termination payments will remain exempt from Income Tax and National Insurance Contributions however employer National Insurance Contributions will be payable on the elements of the termination payment exceeding this amount.
- Benefits in kind – The government will legislate a date to make good benefits in kind which are not accounted for in PAYE. During consultation the Government agreed the provisional date of 6 July. The Finance Bill 2017 will also remove Income Tax and NIC advantages where Benefits in Kind are provided through salary sacrifice or other remuneration arrangements. This change will come into force on 6 April 2017.
- Introduction of grants and student loans for additional courses and the introduction of technical skills courses “T Levels” to improve the way technical education is delivered. It is expected that this will come into force in Autumn 2017.