Spring Budget 2017: Business rates, T-Levels and self-employed tax hike
Published: 08 March, 2017
Chancellor of the Exchequer Phillip Hammond has announced in his Spring Budget plans to reduce the tax gap between employed people and those who are self-employed, as well as changes to business rates and the introduction of T-Levels to address the skills shortage.
Mr Hammond said that the government will continue with its current plan for business rates, as the funds are essential to his plans for reducing the country’s debt and improving infrastructure. However, he announced measures to allow for more business rates relief.
These included that no business losing small business rate relief will see their costs increase by more than £50 a month. Additionally, a £300m fund will be created for local councils to offer discretionary relief for hard-hit cases.
The Chancellor says he is “determined to make Britain the most attractive place to start and grow a business.”
As well as announcing measure to tackle tax avoidance across the board, Mr Hammond said that he is introducing an increase in Class 4 National Insurance Contributions for self-employed peoples from 9% to 10% as of April 2018. This will increase by a further 1% in 2019.
Mr Hammond stated that this will reduce the gap between the self-employed and employees, making the system fairer and increasing funds available for the government.
The Chancellor also condemned the ‘unfair discrepancy’ between tax paid by an employed worker and those who have set up companies. He announced a reduction in the tax-free dividend allowance for directors and shareholders from £5,000 to £2,000, with effect from April 2018.
Mr Hammond also announced the introduction of T-Levels, which will replace over 13,000 qualifications across the UK with 15 career route focused courses for technical disciplines. He said that the number of hours training for 16 to 19-year-old students would increase by over 50% and that the new qualifications will include a three month work placement for every student.