Budget 2017: What it means for you

Philip Hammond has delivered his first, and last Spring Budget (he's moving the Budget to the Autumn). His 'Spreadsheet Phil' reputation led commentators to predict a quiet budget, with better-than-expected economic news, but no flashy giveaways or major announcements out of the blue. And for once, the commentators were right.

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Economy
As expected, there was some positive economic news, which meant the Office for Budget responsibility upgraded some of its more depressing forecasts. Notably GDP growth for the year 2017/18 has been upgraded from 1.4% to 2% - falling back to 1.6% the following year.

It also expects unemployment to continue falling - so there are 750,000 more people in work by 2021. Inflation will be higher than recent years at 2.4% this year, 2.3% next year and 2% the year after - although wages are predicted to keep pace.

As a result of all this, borrowing is going to be less than predicted - at 2.6% of GDP this year. However, Hammond rejected calls to use the opportunity to increase spending - pointing out that with borrowing now at £1.7 trillion, and the cost of borrowing at £50 billion a year - this is no time for a spending spree. As a result, the budget will be fiscally neutral - with all new spending paid for by new tax receipts.

Tax
Hammond took advantage of the only tax initiative that's a big hit with everyone - clamping down on avoidance. Among the measures was a specific pledge for financial penalties for any whizz that comes up with a tax avoidance scheme that is subsequently outlawed by HMRC - aimed at putting them off coming up with these things in the first place. This comes into effect in July.

There was bad news for the self-employed. Hammond argued that they pay lower national insurance rates, and that historically this was reflected in smaller state pensions. With the introduction of the flat rate state pension, this was less fair, and so from April 2018 (when Class 2 NICs are abolished for self-employed people), Class 4 NICs for the self employed will increase from 9% to 10%. Then in 2019 it will increase again to 11%. He argued that this would stop people turning to self employment as a tax wheeze.

Similarly, he has been penalising people who set up a company to channel their income, in order to take advantage of tax benefits. He pointed out that George Osborne's £5,000 tax free dividend allowance was allowing them to take too much income tax free, so he is cutting that to £2,000 from April 2018.

This move will also hit people with large share portfolios, who receive more than £5,000 in dividend income.

The income tax threshold is already due to rise to £11,500 in April (and the higher rate threshold to £45,000).

He rattled through some of the levies too. The soft drink tax levy was confirmed at the rates of 18p and 24p - depending on the sugar content. Fuel duty was frozen again, and the minimum excise on a packet of cigarettes was set at £7.35.

He also confirmed increases in cigarette and alcohol taxes along the uprating rules. This includes things like 35p on a packet of 20 cigarettes, 40p on a 30g packet of tobacco, 2p on a pint of beer, 36p on a bottle of whisky, and 10p on a bottle of wine.

He didn't mention it in his speech, but we will also see the residence nil rate band for inheritance tax introduced from April - which will allow people to leave more of their property to their children.

Businesses
The forthcoming re-rating of business properties to take account of property price rises has put businesses under severe pressure - as their rates have gone through the roof. In the run-up to the Budget, Hammond was called on to take the worst of the pressure off these businesses.

He responded with three measures: any business coming out of the small business rate relief scheme will have increases capped at £50 a month. All pubs with a rateable value of less than £100,000 (90% of pubs) will have a £1,000 discount, and local government will have access to a £300 million fund, which they can use at their discretion to help businesses facing particularly harsh increases.

Hammond confirmed Corporation Tax will be 19% this year, falling to 17% by 2020 - making it the lowest in the G20.

There's good news for smaller businesses worried about the Making Tax Digital proposals - which require them to submit tax returns four times a year rather than once. Hammond announced that those below the VAT registration threshold should be allowed to delay it by a year - and only start submitting quarterly returns next April.

He is also consulting on how to help oil and gas businesses make the most of the last of their reserves as they begin to run out. - and will issue a formal discussion paper.

Savings
The ISA limit is set to rise again - under a timetable laid out by George Osborne - so that the ISA allowance will be £20,000 in the next tax year.

We will also see the Lifetime ISA launch in April - with just a handful of providers in place.

We had a few more details on the Investment Guaranteed Growth Bond, launched through National Savings & Investments. It will be on offer from April, and will pay 2.2% on balances of up to £3,000.

Childcare
The long-awaited tax free childcare initiative will finally see the light of day in April. It will enable families to take advantage of £2,000 of tax free childcare. In addition, Hammond confirmed that from September, the free childcare for working parents with 3 and 4-year-olds will double to 30 hours a week.

Women
To mark the fact that The Budget falls on International Women's Day, there was another £20 million funding for campaigns against violence against women and girls, another £12 million for women's charities through the tampon tax, £5 million on promoting 'returnships' for woman going back to work after a career break, and another £5m for the celebration and education of young people on women's rights

Education
Hammond emphasised we have a major problem with productivity in this country, and announced a number of measures he hoped would help tackle it.

He allocated some of the funding he had already announced for infrastructure in the Autumn Statement. Businesses and universities will get £300 million for research - including funding for new PhD places in science, technology and engineering; and £200m for research fellowships.

There's going to be £500 million for skills training for young people, which has been branded as the introduction of T-levels. He has claimed it's going to be the biggest shake up in education for those over the age of 16 since the introduction of A-levels - which is quite a claim. The enormously disparate world of technical qualifications will be replaced with 15 routes, which he says will be better suited to business needs. There will also be loans available for those completing higher levels of technical qualifications.

He announced new funding for the Department for Education to launch pilots into lifelong learning - to reflect the fact that in future people will be expected to develop their skills as they go through their working life - to keep pace with economic and technological developments.

There will also be money for Grammar schools - within more funding for 110 more Free Schools (on top of the 500 pledged for 2020). There will also be free transport for those pupils who qualify for free school meals and need to travel to attend a Grammar school.

Hammond also announced a further £216 million over the next three years for existing schools.

Technology
In addition to all this funding for training, the government will invest in broadband - including £16 million for a new 5G hub, and £200 million for local projects that leverage private sector investment in broadband networks.

He had been consulting on R&D tax credits, and while he has decided to leave the tax credits themselves untouched, he has pledged to reduce the red tape surrounding them.

Transport
As another barrier to productivity, he is tackling transport. This will include a £690 million competition for local authorities to tackle local congestion.

Regions
There will be six mayors in place shortly, and Hammond says he is already working on devolving further powers to enable areas to take control of their economic destiny. He will publish details of further devolution for the Midlands Engine Strategy tomorrow, and announced £350 million funding for a devolved Scotland, £200 million for a devolved Wales, and £120 million for Northern Ireland.

Health
In response to so much criticism of the crisis of funding in social care and the NHS, Hammond announced a few measures. These will include £2 billion for social care in England over the next three years. He also said local authorities that were failing to work effectively with the NHS on discharging elderly patients into care would be 'identified' and 'supported'. Over the long term, there will be a wide-ranging report into longer term financing of social care later this year - although he has ruled out the introduction of the so-called 'death tax'.

For the NHS, he said the long term plan will come to fruition in the Autumn, when he will announce long term capital spending according to each area's plan. He added that those areas that were ready early would be able to access the funding early too. He also announced £100 million for GP triage in A&E, and funding to help the NHS deal with the recent plan to increase compensation payouts for medical negligence.

Wages
The national Living Wage will rise to £7.50 this April

Fairness
There will be a green paper outlining new consumer rights. It will cover a crackdown on small print, including 'subscription traps' - where people sign up for services without realising they have agreed to an ongoing subscription. It will also demand clearer terms and conditions, and give consumer bodies greater enforcement rights. He said he hoped this would being an end to the frustrations we all feel in daily life, and the feeling that the 'dice is loaded' against us.

Benefits
There were few announcements here - just that the Universal Credit Taper Relief will fall from 65% to 63% in April.

Memorial
Hammond announced a £20 million D-Day memorial on Normandy Beaches - paid for through fines on banks.