The Chancellor has held his first and last Spring Budget. The major announcements in the budget are summarised by the Treasury at:
As we know the increase in NIC for the self-employed was not well received by Conservative MPs. The Prime Minister came to realise that going back on an election pledge and trying to get away with it on a technicality (the legislation which fixed tax rates was narrower than the manifesto headline) would mean that her next manifesto would lose credibility. The Chancellor was also in a corner as a Budget pre-release from the Treasury had said that companies would be prevented from using technicalities in their small print to the detriment of consumers. A change of heart by the Chancellor was thus both welcome and politically inevitable.
The reduction in the tax free dividend allowance from £5,000 to £2,000 a year after it was introduced is unwelcome. Unfortunately Chancellors of all parties have an unfortunate knack of only ever seeing one side of an argument – and that is the one which appears to increase the tax take. In practice, the law of unintended consequences means it often does not work out quite that way!