The Budget 2017: What does it mean for you?

Chancellor Philip Hammond revealed the 2017 budget on 8th March. It has been met with some opposition, some confusions and some praise. The BBC have gone through the key points about the Budget, and what they mean for YOU.

 

Tax rise for the self-employed:

 

The main National Insurance contribution rate paid by the self-employed will rise in the next few years.

 

It will increase from its current level of 9% to 10% in April 2018, and then to 11% in April 2019 for those making a profit of more than £8,060.

 

The level for employees for these Class 4 contributions is 12%.

 

The chancellor said that this would raise £145m a year by 2021-22. On its own, the change announced in the Budget will leave 2.84 million people facing an average annual increase of £240.

 

As previously announced, Class 2 payments - which have a lower threshold of £5,965 or more in profits a year - will be abolished.

 

Taken together, only the self-employed with profits over £16,250 will have to pay more as a result of these changes - at an average cost of 60p a week to those affected.

 

 

Shareholders hit:

 

Director shareholders will see a tax break reduced on the dividends they receive.

 

The tax-free dividend allowance - which only came into force a year ago - will be reduced from £5,000 to £2,000 from April 2018.

 

That will affect those who own a small business and pay themselves in dividends alongside a small salary.

 

It will also hit people with large portfolios of shares.

 

Experts say that with an ISA allowance of £20,000 available to use from April, many investors will not need to worry.

 

 

Help for savers:

 

A new government-backed savings product was promised in November's Autumn Statement - but we did not have date or a rate.

 

Now the chancellor has said the Investment Guaranteed Growth Bonds will be offered by National Savings and Investments from April, paying interest of 2.2%.

 

The chancellor described this as a market-leading rate, which it is - but it is only the equal of the best-buy three-year bond on the market now. Critics have already labelled the product as a "sideshow" and "underwhelming".

 

The bond will be open to those aged 16 and over, subject to a minimum investment limit of £100 and a maximum investment limit of £3,000. Savers must lock in their money for three years.

 

Official forecasts estimate that the cost of living will rise at 2% or above for the next three years.

 

 

Sin taxes:

 

There will be no change to previously planned inflation-linked increases in duties on alcohol and tobacco, but a new minimum excise duty is being introduced on the cigarettes targeting the cheapest tobacco.


This, along with the previously announced measures, will mean a packet of 20 cigarettes will cost 35p more from 18:00 GMT on Wednesday. A 30 gramme pack of hand-rolled tobacco will cost 42p more.

 

 

Subscriptions:

 

Concerns have been raised that many people are falling into a subscription trap, by signing up for a paid-for service without meaning to - for example, when a paid subscription starts automatically after a free trial has ended.


Citizens Advice estimates that two million consumers each year have problems cancelling subscriptions on, for example, TV subscriptions.


Those with mental health problems are often vulnerable to these issues.


The chancellor confirmed that new measures will be considered in a Green Paper in the summer.

 

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