Personal allowance and higher rate threshold
The Chancellor confirmed that the personal allowance will rise to £11,500 and the higher rate threshold to £45,000 from 6 April 2017. He stated that the government will meet its commitment to raise the income tax personal allowance to £12,500 and the higher rate threshold to £50,000, by the end of this Parliament. Once the personal allowance reaches £12,500, it will then rise in line with the Consumer Prices Index (CPI).
NS&I Investment Bond
NS&I will offer a new three-year savings bond from Spring 2017. The indicative rate is 2.2% but this may be adjusted to reflect market conditions when the product is launched. The bond will be open to those aged 16 and over, subject to a minimum investment limit of £100 and a maximum investment limit of £3,000.
The annual subscription limit for Junior ISAs and Child Trust Funds will be uprated in line with CPI to £4,128.
As previously announced, the ISA limit will rise from £15,240 to £20,000. Both of these changes take effect from 6 April 2017.
National Living Wage (NLW) and National Minimum Wage (NMW)
Following the recommendations of the Low Pay Commission, the government will increase the NLW to £7.50 from April 2017.
The government will also accept all of their recommendations for the other NMW rates, which were last
increased in October 2016. From April 2017 the increased rates will be as follows:
- £7.05 per hour for 21 to 24 year olds
- £5.60 per hour for 18 to 20 year olds
- £4.05 per hour for 16 to 17 year olds
- £3.50 per hour for apprentices (under 19, or 19 and over in the first year of their apprenticeship).
The government will invest to strengthen NMW enforcement. They will also provide additional support
targeted at small businesses to help them to comply, and a campaign aimed at raising awareness amongst workers and employers regarding their rights and responsibilities.
Universal Credit taper
From April 2017, the taper rate that applies to earnings above the income threshold in Universal Credit will be reduced from 65% to 63%.
The government will publish a consultation on options to tackle pension scams, including banning cold
calling in relation to pensions, giving firms greater powers to block suspicious transfers and making it
harder for scammers to abuse ‘small self-administered schemes’.
Pay as You Earn Settlement Agreement (PSA) process
As announced at Budget 2016 and following consultation, the government will legislate in Finance Bill 2017 to simplify the process for applying for and agreeing PSAs.
This will have effect in relation to agreements for the 2018/19 tax year and subsequent tax years.