Spring Budget 2017

How does the Budget affect Northern Ireland businesses?

The Chancellor, Philip Hammond, delivered his Spring Budget 2017 statement on Wednesday 8 March 2017. We have summarised the key points from the Budget and highlighted key issues affecting Northern Ireland businesses.


Growth forecast for the next few years:

  • 2.0% in 2017
  • 1.6% in 2018
  • 1.7% in 2019
  • 1.9% in 2020
  • 2.0% in 2021

Government borrowing and debt


  • £51.7 billion in 2016-17
  • £58.3 billion in 2017-18
  • £40.8 billion in 2018-19
  • £21.4 billion in 2019-20
  • £20.6 billion in 2020-21
  • £16.8 billion in 2021-22

Debt forecast:

  • 86.6% in 2016-17
  • 88.8% in 2017-18
  • 88.5% in 2018-19
  • 86.9% in 2019-20
  • 83.0% in 2020-21
  • 79.8% in 2021-22

Northern Ireland specific announcements

An additional funding of almost £120 million for the Northern Ireland Executive.

Corporation Tax

From April 2017 the Corporation Tax rate is to fall to 19% and then fall again to 17% from April 2020. Northern Ireland plans to introduce a Corporation tax rate of 12.5% in 2018.

Tax avoidance and evasion

From July 2017 the government will introduce a tough new financial penalty for professionals who enable a tax avoidance arrangement that is later defeated by HM Revenue & Customs.

Business rates

A number of changes for business rates were announced but these do not apply to Northern Ireland.

Income tax

The personal allowance will rise to £11,500 from April 2017 and £45,000 for the higher rate threshold. The government also confirmed their commitment to increasing these thresholds to £12,500 and £50,000 respectively by the end of this parliament.

Self-employed taxes

The Chancellor highlighted the differences between the National Insurance contributions (NICs) of the employed and self-employed. For example, an employee earning £32,000 will incur between him and his employer £6,170 of NICs. A self-employed person earning the equivalent amount will pay just £2,300.

To address this issue, Class 2 NICs are to be abolished in April 2018 and from this date the main rate of Class 4 NICs for the self-employed will increase to 10% with a further increase to 11% in April 2019. Since Class 4 NICs are chargeable as a proportion of profits, all self-employed people earning less than £16,250 will still see a reduction in their total NICs bill.


As announced previously the Lifetime ISA will be introduced in April 2017. The annual ISA allowance will increase to £20,000 from April 2017.

The new NS&I bond announced at the Autumn Statement will be available from April 2017 and will pay 2.2% on deposits up to £3,000.

Dividend Allowance

The tax-free dividend allowance for director/shareholders will be reduced from £5,000 to £2,000 from April 2018.

Duties and levies

Vehicle Excise Duty rates for hauliers and the HGV Road User Levy have been frozen. A new minimum excise duty on cigarettes will be introduced based on a pack price of £7.35.

There are no changes to previously planned upratings of duties on alcohol and tobacco. Therefore from 13 March 2017, the duty rates on beer, cider, wine and spirits will increase by RPI inflation. As announced at Budget 2014, duty rates on all tobacco products will increase by 2% above RPI inflation. This change will come into effect from 6pm on 8 March 2017.

The final rates for the soft drinks levy have been set at 18 pence per litre for the main rate and 24 pence per litre for the higher band.


The tax-free childcare policy will be introduced in April 2017 and will allow families across the UK to receive up to £2,000 a year towards the cost of childcare for each child under 12 years old. See help paying for childcare.

In order to help people back into employment after a career break, £5 million will be committed to promoting returnships to the public and private sector.


From 1 April 2017 the VAT registration threshold will increase from £83,000 to £85,000 and the deregistration threshold from £81,000 to £83,000. See registering for VAT.

Unincorporated businesses and landlords with turnover below the VAT threshold will have until April 2019 before digital record keeping and quarterly updates become mandatory. Those with annual turnover above the VAT threshold will still be required to keep digital records and send HMRC quarterly updates from April 2018.