UK – Spring Budget 2017

Published: 14 March 2017

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The UK Chancellor of the Exchequer Philip Hammond delivered last week his first Budget. Following his speech, HMRC published in its webpage the tax-related documents.

Among the proposed measures, AIMA would like to underline the following: (i) abolition of the class 2 NICs charge, and changes to class 4 NICs, which will increase the main rate from 9% to 10% (April 2018) and subsequently to 11% (April 2019). (ii) alongside that, the tax-free dividend allowance will be reduced from £5,000 to £2,000 from April 2018. More crucially, we ought to expect in the mid-term a more in depth reform of employment taxes (see RSA report). On the corporate tax front, in order to encourage investment in the UK and make it easier for businesses to raise finance, the UK Government has suggested that:  (a) will renew and extend the administrative simplifications of the Double Taxation Treaty Passport scheme to assist foreign lenders and UK borrowers. (b) introduce an exemption from withholding tax for interest on debt traded on a Multilateral Trading Facility.

The government will consult in spring 2017 on implementation of the exemption. The Finance Bill is due to be published on 20 March, when more details will become available.  For further information, please contact Paul Hale or Enrique Clemente.