Published on Wednesday 08 March 2017 in Van News
Chancellor Philip Hammond has delivered his Spring Budget, and there's a mix of news – some good, some bad – for families, drivers and small business owners. Vanarama Content Editor Tom Roberts reports.
Let's hit the first big item Vanarama customers are going to care about: National Insurance contributions WILL RISE for the self-employed – from 9% to 11% by 2019. This will raise £145m a year by 2021-22 at an average cost of 60p a week to those affected!
This rise in National Insurance goes against the Conservative Party's 2015 manifesto in which they promised they WOULD NOT raise it. There will be no changes to income tax, VAT or other National Insurance categories.
BBC journalist Peter Henley posted a Tweet shortly after the speech which read: "V quiet in the Commons when Hammond hit White Van self-employed. Not so quiet on my emails..."
The best of the rest
Mr Hammond has obviously tried hard to paint a positive picture of the economy and his future plans for Brexit Britain – but self-employed business people are not going to be over the Moon. During the Prime Minister's Questions session held before the speech, the Prime Minister Theresa May and the Chancellor both looked relaxed, as if nothing of much concern was going to happen, and then the speech began. Here's the highlights:
The state of the UK economy
- UK second-fastest growing economy in the G7 in 2016, with growth forecast for 2017 upgraded from 1.4% to 2%.
- A further 650,000 people expected to be in employment by 2021.
- Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020.
Mixed news for businesses
- The main rate of National Insurance contributions from self-employed business people to increase from current rate of 9% to 10% in April 2018 and 11% in April 2019.
- Reduction in tax-free dividend allowance for shareholders and directors of small private firms from £5,000 to £2,000 - the measure will come into force in April 2018.
- £435m for firms affected by increases in business rates, including £300m hardship fund for worst hit.
Investment for transport
- Transport spending of £90m for the north of England and £23m for the Midlands to address pinch points on roads.
- £270m for new technologies such as robots and driverless vehicles.
Education to receive attention
- Increased investment in schools of £216m.
- Free school transport extended to all children on free school meals who attend a selective school.
National Health Service gets welcome boost
- £100m to place more GPs in accident and emergency departments for next winter.
- Additional £325m to allow the first NHS Sustainability and Transformation Plans to proceed.