On the 8th of March, Philip Hammond delivered his first and last Spring Budget to Parliament.

We’ve included the highlights, which include increases to NICs for the self-employed, measures to help businesses hit hard by the business rates revaluation, and the already announced increase to the IPT.

Income tax

The personal allowance will increase to £11,500 from 6 April 2017 and the point at which the higher rate of Income Tax will apply will increase to £45,000 from 6 April 2017. Although, this will remain at £43,000 for Scottish rate taxpayers.

National Insurance Contributions (NICs)

Class 4 NICs will increase from 9% to 10% on 6 April 2018, and to 11% on 6 April 2019. Class 2 NICs will be abolished from 6 April 2018.

IPT

Insurance Premium Tax (IPT) will increase by 2 per cent: As reported in the Autumn Statement 2016, the IPT, a tax on general insurance premiums, will increase from 10 to 12 per cent in June 2017. This increase means the IPT has doubled in fewer than two years, as it was 6 per cent in October 2015. When this latest increase was announced, the Association of British Insurers called it a ‘hammer blow for the hard-pressed’, and the Automobile Association (AA) warned that it will add about £10 per year to the average car insurance premium.

Dividend allowance

The tax-free dividend allowance will be reduced from £5,000 to £2,000 from 6 April 2018.

Business tax

The rate of corporation tax will reduce from 20% to 19% from 1 April 2017. It will further reduce to 17% in 2020.

Pensions

Money purchase annual allowance (MPAA)

As expected, the MPAA will reduce from £10,000 to £4,000 from 6 April 2017. The MPAA applies to individuals who have accessed their money purchase pensions using pension flexibility.

Transfers to qualifying recognised overseas pension schemes (QROPS)

A transfer request to a QROPS made on or after 9 March 2017 could face a tax charge of 25% on the amount transferred. The tax charge will not be deducted if at least one of the following applies:

• Both the individual and the pension savings are in the same country after the transfer.
• The QROPS is in one country in the EEA and the member is resident in another EEA country after the transfer.
• The QROPS is an occupational scheme provided by the individual’s employer.
• The QROPS is an overseas public service pension scheme.
• The QROPS is a pension scheme established by an international organisation.

ISAs

The lifetime ISA will be available from 6 April 2017 and allows those under 40 to save up to £4,000 each year and receive a bonus of up to £1,000 a year on these contributions. These proceeds can be withdrawn tax-free to put towards a first home or when they turn 60.

In addition, the ISA limit will increase to £20,000 from 6 April 2017.

The information provided is based on our current understanding of the Spring Budget 2017 and associated documents may be subject to alteration as a result of changes in legislation or practice.