Budget 2017: Govt to slash dividend allowance

Hammond’s 2016 Autumn Statement predicted a slump in the country’s finances until 2021, to the tune of £122 billion (US$149 billion).

Class 4 NI contributions for those in self-employment will increase by 1 per cent to around 10 per cent from next year, and will increase to 11 per cent the following year.

At the weekend, Hammond suggested there was no “pot of money” to be spent, despite claims that higher tax receipts could give him an extra £45 billion to play with.

However, Hammond said he would use any headroom to ensure that he had flexibility in the years ahead.

‘Despite this double-whammy tax change, pitched as a measure to ensure “fairness” for the employed, it should not be forgotten that while the self-employed now enjoy a reduced rate of national insurance, they also miss out on sick pay, holiday entitlement and other perks enjoyed by those in employment, ‘ he noted.

In fact, the self-employed got off relatively lightly.

Also from April 2018, the amount of dividends anyone can earn before they pay tax will fall from £5,000 now to just £2,000.

The measure would raise a net £145m a year, Hammond added.

The change in National Insurance Contribution rates for the self-employed does, however, mark a change in tack for the Government – which is why it is something of a gamble for Mr Hammond.

“A key feature of the tax system over the last 40 years has been to incentivise entrepreneurship, recognising the risks that come with self-employment”.

However, it also raises concerns for workers in the so-called “gig economy” employed by the likes of Uber and Deliveroo, as well as small businesses.

Changes to business rates, adult social care funding and the plans for the NHS will also be under the spotlight in his first budget announcement since taking over from George Osborne.

The measures will see all pubs with a rateable value of less than £100,000 receive a £1,000 discount on their 2017 bill.

– He added debt remains too high, productivity too low and too many families are “feeling the squeeze”, adding ‘so our job is not done’.

The new economic programme outlined by the Chancellor strives for a “stronger, fairer, better Britain” outside the EU. And on International Women’s Day it will hit over one and a half million women.

“These tax rises should be part of wider reforms that address remaining incentives to become self-employed while offering greater support with the likes of maternity pay and pension savings”.

“The UK Government, once again, has an opportunity to be truly ambitious and really make a difference to the future of the UK’s energy sector”.

The Organization for Economic Co-operation and Development predicted United Kingdom growth of 1.6 percent this year, up from the 1.2 percent predicted in November.

Prime Minister Theresa May has insisted that Britain will leave Europe’s single market or tariff-free zone in order to control European Union immigration, thus delivering a so-called “hard” Brexit meaning the country will need a series of new trade deals globally.

But the big story here is that overall borrowing is not going to fall as dramatically during coming years as some forecasters had expected.