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The Chancellor said that the resilience of the UK economy had continued to defy expectations and the country had enjoyed robust growth but he made clear that there was no place for complacency in the current climate.
Business and enterprise
Mr Hammond announced a three-point plan which he said would amount to an additional £435million support for business rates changes. Any firm losing existing rate relief will be guaranteed that their bill will not rise by more than £50 a month next year. In addition, there will be a £1,000 discount for pubs with a rateable value of less than £100,000 and the creation of a £300million fund which will enable local authorities to offer discretional relief. He reiterated the commitment made by his predecessor, George Osborne, to bring the Corporation Tax rate down to 17 per cent by 2020. A reduction to 19 per cent will take effect from next month. Following concerns about the current timetable, he confirmed that quarterly reporting would be delayed for small businesses for a year (at a cost of £280million).
Controversially, it was revealed that National Insurance contributions will rise for the self-employed. Under proposals, Class 4 NICs will increase from nine per cent to 10 per cent next April and to 11 per cent in 2019. Trying to defend what will undoubtedly be a contentious move, the Chancellor said that the “unfair discrepancy” in contributions between different groups of workers could no longer be justified. The personal allowance will rise to £11,500.
Pensions and savings
Mr Hammond confirmed that the tax-free dividend allowance for shareholders would be cut from £5,000 to £2,000 as of April 2018.
Tax evasion, avoidance and aggressive tax planning
The Chancellor said that a fair tax system required people to pay their dues and a series of measures to curb abuses of the system are expected to raise an additional £820million for the Treasury. A raft of measures to tackle non-compliance were announced, including preventing businesses converting capital losses into trading losses, curbing abuse of foreign pension schemes, introducing UK VAT on roaming telecoms services and imposing new financial penalties for professionals who help facilitate a tax avoidance arrangement that is later defeated by HM Revenue & Customs.