The Chancellor of the Exchequer, Philip Hammond, delivered "the last Spring Budget" on Wednesday 8 March. As he announced last year, in future the main annual fiscal event will be the Autumn Budget. The Spring Statement is intended to be only a report by the government to the Parliament on public finances and consultations.

In general, this Budget was a fairly low key affair with no "surprise major announcements" as most of the announcements had already been discussed in the press during the past couple of weeks. The one announcement which has drawn much criticism is the increase in NICs for the self-employed. The press has argued that this represents a breach of the Conservative party's 2015 election manifesto promise not to increase NICs and an attack on the entrepreneur sector which the government has said is central to developing the economy pre and post Brexit.

Below is a summary of the key developments:

  1. Increase in NICs for self-employed

    The NIC rates for the self-employed are 9% on profits between £8,060 and £43,000 and 2% on profits over £43,000. From April 2018, the 9% will rise to 10% and rise again to 11% in 2019. The 2% will not be changed.

  2. Dividend taxation

    Tax-free dividend allowance for shareholders will be reduced from £5,000 to £2,000 with effect from April 2018.

  3. Income Tax thresholds.

    Recommitment that the threshold at which workers pay income tax will be increased to £12,500 a year by 2020 and the 40% tax rate will not apply until £50,000.

  4. Corporation Tax

    Confirmation that this will be cut to 19% from April 2017, with a further cut to 17% from April 2020.

  5. Employment

    The off-payroll rules ensure that individuals who work through their own company pay broadly equivalent taxes as employees, where they would be employed if they were taken on directly. The government has confirmed that it is proceeding with measures that shift the responsibility for deciding if the off-payroll rules for engagements in the public sector apply, from an individual worker’s PSC to the public sector body.

  6. Stamp Duty Land Tax

    As a result of consultation, the government will delay the reduction in the filing and payment window until 2018-19.

  7. Offshore property developers

    The government will amend legislation to ensure that all profits realised by offshore property developers developing land in the UK, including those on pre-existing contracts, are subject to tax, with effect from 8 March 2017.

  8. Research and development (R&D)

    To further support investment in R&D, the government will make administrative changes to the R&D Expenditure Credit to increase the certainty and simplicity around claims and will take action to improve awareness of R&D tax credits among SMEs.

  9. Withholding tax on interest

    In order to encourage investment in the UK and make it easier for businesses to raise finance, the government will:

    (a) renew and extend the administrative simplifications of the Double Taxation Treaty Passport scheme to assist foreign lenders and UK borrowers. This scheme simplifies access to reduced withholding tax rates on interest that are available within the UK’s tax treaties with other countries;

    (b) introduce an exemption from withholding tax for interest on debt traded on a Multilateral Trading Facility, removing a barrier to the development of UK debt markets. The government will consult in spring 2017 on implementation of the exemption.

  10. North Sea oil and gas

    A panel of experts will be set up to examine the use of tax incentives to make it easier for operators to sell oil and gas fields and the Treasury will also publish a discussion paper on how to help the industry.

  11. Money purchase annual allowance (MPAA)

    The MPAA counters an individual using the flexibilities around accessing a money purchase pension arrangement as means to avoid tax on their current earnings. The MPAA is currently £10,000 and applies to individuals who have flexibly accessed their money purchase pension savings. The MPAA is being reduced from £10,000 to £4,000 from 6 April 2017.

  12. Qualifying recognised overseas pension schemes (QROPS)

    The government will legislate in Finance Bill 2017 to apply a 25% tax charge to pension transfers made to QROPS. Exceptions will be made to the charge, allowing transfers to be made tax free where people have a genuine need to transfer their pension, where:

    (a) both the individual and the pension scheme are in countries within the European Economic Area (EEA); or

    (b) if outside the EEA, both the individual and the pension scheme are in the same country; or

    (c) the QROPS is an occupational pension scheme provided by the individual’s employer.

  13. VAT collection on online sales of goods

    The government intends to publish a call for evidence on the introducing a new VAT collection mechanism for sales of goods using online market places to prevent overseas traders avoiding VAT.

  14. VAT on roaming mobile services

    There will be changes to the VAT treatment of roaming mobile phone charges so that they are aligned with the international approach to these.

  15. Business rates

    The business rates revaluation takes effect in England from April 2017. In addition to the £3.6 billion transitional relief which was announced in November 2016, the government will provide £435 million of further support for businesses facing significant increases in bills from the English business rates system.