Key highlights include:
- The Office for Budget Responsibility (OBR) revised its forecast for growth up to 1.5% – a rise of 0.1% on the previous forecast announced in Autumn Budget 2017.
GDP is expected to fall back to 1.3% in 2019 and 2020 as the OBR left its November 2017 forecast unchanged.
Borrowing fell to £45.2 billion in 2017/18 –£4.7 billion lower than the OBR’s forecast in November 2017, while Hammond conirmed any further borrowing is expected to fund capital investment only.
Debt is also expected to start falling as a share of GDP in 2018/19, according to the OBR.
Aside from updated economic forecasts, the rest of the chancellor’s attention focused on policy consultations – some new, others previously announced. These consultations may feed into Autumn Budget 2018.
The tax-free dividend allowance will reduce from £5,000 to £2,000 from 6 April 2018.
The bands and rates at which people in Scotland pay income tax have been changed for 2018/19, but it will be business as usual for taxpayers in the rest of the UK.
Businesses need to be aware that from 6 April 2018, the minimum employer contribution towards an employee’s workplace pension will increase from 1% to 2%. These contributions are usually mandatory for workers aged between 22 and state pension age, earning more than £10,000 a year.
National minimum wage rates for all ages and apprentices are increasing from 1 April 2018. For 18 to 20-year-olds and 21 to 24-year-olds, it will be the largest increase in a decade.
The lifetime allowance, which is the maximum amount an individual can draw from pensions without incurring extra tax charges, rises to £1.03 million from 6 April 2018.
The overall annual ISA subscription limit remains at £20,000, although the Junior ISA allowance increases to £4,260 from 6 April 2018.