Friday, 10 March 2017 16:04

Spring Budget 2017 - The Highlights

Chancellor Philip Hammond presented his Spring Budget to the House of Commons.


Corporation Tax

Corporation tax rate will be 19% for the financial years beginning 1 April 2018 and 1 April 2019 and 17% for the financial year beginning 1 April 2020.


Substantial Shareholding Exemption (SSE)

From 1 April 2017 the SSE rules will be simplified by removing the investing company requirement and providing more comprehensive exemption for companies owned by qualifying institutional investors.


Image rights

In spring 2017, the government will publish guidelines for employers who make payments for image rights to their employees in order to improve the clarify of the existing rules.


Research and development (R&D)

The administrative changes to R&D tax credits will be made in order to increase the certainty and simplicity around claims.


Appropriation to trading stock

Legislation will be introduced to remove the ability for businesses to convert capital losses into trading losses where an asset is appropriated to trading stock.


Double Taxation Treaty Passport Scheme

The government will renew and extend the administrative simplifications of the DTTPS to assist foreign lenders and UK borrowers. For overseas lenders, the scheme simplifies access to reduced withholding tax rates on interest that are available within the UK’s tax treaties with another territories. The DTTPS is currently restricted to corporate lenders and corporate UK borrowers but from 6 April 2017 this restriction will be removed and it will apply to all types of overseas lenders and UK borrowers.


National Insurance Contributions

Class 2 NI contributions will be abolished from April 2018. Class 4 NI contributions will increase from 9% to 10% with effect from 6 April 2018 and from 10% to 11% with effect from 6 April 2019


Dividend allowance reduction

The tax-free dividend allowance will be reduced from £5,000 to £2,000 from 6 April 2018


Trading and property income allowances

The government will legislate in Finance Bill 2017 to create two new income tax allowances of £1,000 each for trading and property income. The allowances can be deducted from income instead of actual expenses.


Inheritance tax

Under changes announced by the government an additional nil-rate band will be introduced for each individual to enable a family home to be passed wholly or partially tax-free on death to direct descendants. Current “residence nil-rate band” of £325,000 will increase by the following amounts from 6 April 2017


2017/2048 - £100,000

2018/2019 - £125,000

2019/2020 - £150,000

2020/20121 – £175,000


Business Rates

The government will provide support for small business facing significant increases in bills following the business rates revaluation due to take effect in England from April 2017


Salary Sacrifice

The legislation will be introduced in Finance Bill 2017 to remove income tax and employer NICs advantages where benefits-in-kind are provided through salary sacrifice or other optional remuneration arrangements, such measures coming into force from 6 April 2017.


Tax-Free Childcare Scheme for working parents

A new scheme will provide up to £2,000 a year in childcare support for each child under 12.



Contact Kelmer UK Ltd at This email address is being protected from spambots. You need JavaScript enabled to view it. for more information and personalised assistance


Related items

  • UK Construction Industry Scheme: are you liable?

    UK: Leading accountancy firms have warned that the recent collapse of Carillion is expected to cause a rise in the number of construction companies going bust due to being subcontractors in its supply chain and so missing out on payments.
    Following the winding up orders, which were made against Carillion Plc and associated companies in January 2018, and the subsequent woes from subcontractors that the industry is “systemically broken”, there were calls from the public for the government to act and introduce new changes in construction practices.

  • Hong Kong implements the two-tiered profits tax rates regime

    On March 29 2018, Hong Kong’s Legislative Council passed Inland Revenue (Amendment) (No. 3) Ordinance 2018 (the Ordinance) to implement the two-tiered profits tax rates regime announced in the 2017 Policy Address.

    The two-tiered profits tax rates regime will be applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first $2 million of profits of corporations will be lowered to 8.25 per cent. Profits above that amount will continue to be subject to the tax rate of 16.5 per cent. For unincorporated businesses (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 per cent and 15 per centA tax-paying corporation or unincorporated business may save up to $165,000 and $150,000 each year respectively.

  • VAT changes in China starting from May

    Good news about the Chinese VAT tax rate since the Chinese State Council, during the meeting chaired by Premier Li Keqiang and held on 28 March 2018, announced that China will cut VAT tax rates related to some industrial sectors. The State Council decision is part of a tax reduction plan amounting to 400 billion yuan ($63.58 billion) to drive high-quality industries development.

    Indeed, the meeting pointed out that in China the tax reduction over the past five years has reached the amount of 2.1 trillion yuan.