From April 2018 the main rate of Class 4 NI for the self-employed will increase from 9% to 10% and will increase further to 11% in 2019. As previously announced, Class 2 NI contributions will be abolished from 2018. These changes are aimed at reducing the disparity in tax between the self-employed and the employed.
As previously announced, in 2017/18 the personal allowance for England, Wales and Northern Ireland will increase to £11,500 and the higher-rate threshold will increase to £45,000.
Scottish rates are set by the Scottish Parliament. For 2017/18 the personal allowance will also be £11,500, but the higher-rate threshold will be lower than the rest of the UK at £43,430.
Capital Gains Tax
There were no changes announced in the Budget.
No new announcements were made in the Budget, but as a reminder, April will see the introduction of the Residence Nil Rate Band. This is an additional allowance of £100,000 (increasing progressively to £175,000 by April 2020) that can be used against the value of an individual’s residence if it is left to their children or grandchildren. The allowance will be reduced or eliminated for estates worth more than £2 million.
The tax-free Dividend Allowance will be reduced from £5,000 to £2,000 in April 2018. This will bring more dividend receipts into taxable bands. Dividends above this level will be taxed at 7.5% (basic-rate), 32.5% (higher-rate), and 38.1% (additional-rate).