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Budget 2017: First Thoughts

22nd November 2017

Economy

GDP growth forecast

2017-18 1.5%
2018 -19 1.4%
2019-20 1.3%
2020-21 1.5%
2021-22 1.6%

 

Inflation

Annual rate of CPI inflation forecast to fall from peak of 3% to 2% in the year.

Public sector net borrowing as % of GDP

2017-18 2.4%
2018-19 1.9%
2019-20 1.6%
2020-21 1.5%
2021-22 1.3%

 

National debt as % of GDP

2017-18 86.5%
2018-19 86.4%
2019-20 86.1%
2020-21 83.1%
2021-22 79.3%

 

Business rates

From April 2018, increases in business rates will be pegged to CPI instead of RPI.

Tax and NIC

  • SDLT abolished for first-time buyers of property up to £300,000. First-time buyers of property less than £500,000 will pay no SDLT on the first £300,000.
  • Personal allowance to rise to £11,850 in April 2018 and threshold at which higher-rate tax is charged to increase to £46,350.
  • No benefit in kind for electric cars charged at work.
  • R&D tax credit raised to 12% for large company scheme.
  • VAT threshold for small business to remain at £85,000 for two years.
  • Freezing indexation allowance for Capital Gains Tax from January 2018.
  • Digital economy – from April 2019, income tax will be applied on royalties on UK sales paid to low-tax jurisdictions.
  • Government is also looking at a split VAT payment model to reduce online VAT fraud and improve VAT collection.