The UK Chancellor delivered the 2017 UK budget statement on 08/03/2017, some of the issues highlighted before the statement was announced were:
- The social care system
- The National Heath Service
- Businesses rates
Since the beginning of February Sterling has fallen against the Dollar from about 1.27 to levels of about 1.22 – 1.21, the price seems to be in a range of about 1.28 – 1.20. As long as sterling stays above the 1.20 level I wouldn’t put too much emphasis on the decline of the value of the pound just yet.
Watch the full UK budget statement here.
Highlights of the UK Budget 2017
Regarding the topics that were under scrutiny pre-release of the UK budget, this is what the UK Chancellor announced:
- The UK government will put £2 billion towards adult social and £425 million into the NHS for the next 3 years.
- This year the government will reduce the tax-free dividends from £5000 to £2000.
- The UK government will be providing a £435 million relief for small businesses affected by the new business rate revaluation.
However, the biggest talking point of the UK budget was that National Insurance Contributions will be increased for the self-employed. This part of the budget is controversial for numerous reasons. Some of the critics of the new UK budget states that this move “betrays the Conservative’s manifesto”. The manifesto of the Conservative party promised not to raise Income tax, VAT or national insurance contributions.
The Chancellor defended his decision by indicating the new UK budget is meant to promote a more fairer tax system. Currently, self-employed people pay less tax relative to people who are employed but still can enjoy the same levels of benefits.
Summary of the rest of UK Budget 2017
- The forecasted growth for the UK in 2017 has been revised up from 1.4% to 2%. This is due to strong growth in 2016, and record levels of employment.
- Government borrowing will be cut by about three-quarters of the current levels.
- From 2019, 16-19-year-olds will be able to enrol on technical qualifications (T-levels). These will include agriculture, digital or construction, £500 million will be invested into these qualifications.
- £210 million is to be invested in science research programmes and £90 million will be invested in PhD placements. £270 million will be used to launch the Industrial Strategy Challenge Fund – which is a fund to support research in science and engineering.
- Students wishing to study for a doctoral degree will be able to get a government funded loan from 2018.
- The government will invest £320 million into free schools, and £216 million is to be given to existing schools.
- Free transport will be given to children who come from low-income families and live 2 – 15 miles away from their schools.
- By the end of next year, working parents will be eligible for tax-free childcare.
- The government will be introducing new ways of protecting UK consumers.
- £910 million is to be spent on improving infrastructure and transportation.
- £16 million is to fund a national 5G network.
- A new NS&I Investment Bond is to be made available, holders will be able to save £100 – £3000 for 3 y years.
- A new lifetime ISA will be available for young adults this year.
- This year is the 100th anniversary of International Women’s Day, and the government is planning to celebrate it with some new projects. They will also be giving £20 million more to the Ending Violence Against Women and Girls Strategy.
- Small businesses will have a year until they have to go digital with their tax records.