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Spring Statement 2018

15th March, 2018

On 13 March 2018, Chancellor Philip Hammond presented his first Spring Statement. Nottingham chartered accountants Clayton & Brewill, takes a look at some of the announcements, along with other key changes that are coming into effect in the near future.

Spring Statement


Overall it was quite a positive Spring Statement, in which the Chancellor provided an update on the performance of the economy. Mr Hammond revealed that the economy is expected to grow at the slightly faster rate of 1.5% in 2018, compared with the 1.4% forecast in the Autumn Budget.

He also revealed that debt and borrowing have been revised downwards, with the budget deficit now set to reach £45.2bn this year and debt expected to start falling as a share of GDP from next year. Inflation is also predicted to fall back down to the Bank of England’s 2% target over the coming 12 months. The Chancellor suggested that the UK’s public finances have reached a ‘turning point’.

Measures for businesses and the self-employed

Business rates

At the Autumn Budget 2017 it was announced that business rates revaluations will take place every three years, rather than every five years, following the next revaluation. At the Spring Statement the Chancellor announced that the next revaluation will be brought forward from 2022 to 2021, meaning that the first change to three-year revaluations will take place in 2024.

Dividend allowance

The Dividend Allowance is set to be reduced from £5,000 to £2,000 from 6 April 2018, just two years after it was first introduced. The stated aim of the move is to ‘address the unfairness’ around the director-shareholders’ tax advantage, as well as what the Chancellor described as the ‘extremely generous tax break for investors with substantial share portfolios’.

Changes to car fuel benefit rates

From April 2018 the benefit-in-kind rates for cars will increase significantly, with further rises planned in 2019 and 2020. The increases are likely to result in cost rises for employers providing company cars to their employees.

In addition, from 6 April 2018, the taxable diesel car benefit for diesel cars will rise from 3% to 4%, although the maximum fuel rate remains at 37% (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard).

Compulsory employer pension contributions to rise

The pensions auto-enrolment legislation currently requires employers to contribute at least 1% on the qualifying pensionable earnings for eligible jobholders. From 6 April 2018 this will rise to 2%, with a further rise to 3% planned in April 2019.


The Chancellor announced various consultations on the VAT registration threshold, tax relief on training and skills and Entrepreneurs Relief. These can be found at

Personal measures

Personal allowance and higher rate threshold

 Personal allowance to increase to £11,850 from 6 April 2018. The higher rate threshold will also increase to £46,350 from 6 April 2018

Capital gains tax  (CGT)

 The CGT annual exemption will increase to £11,700 for individuals and £5,850 for trustees from 6 April 2018.

National Living Wage (NLW) and National Minimum Wage (NMW) rates

From 1 April 2018 the NLW for workers aged 25 and over will rise to £7.83 per hour. The NMW rates will also increase, rising to £7.38 for those aged 21-24 and to £5.90 for workers aged 18-20. The rate for 16 and 17-year-olds will go up to £4.20, while the NMW for apprentices (those under 19, or 19 or over and in the first year of their apprenticeship) will be set at £3.70.

Increase in the pensions Lifetime Allowance

 The Lifetime Allowance represents the maximum amount that an individual can save into their pension pot and still benefit from tax relief at their marginal rate. As previously announced, it will increase in line with CPI for 2018/19, rising from £1,000,000 to £1,030,000.

To discuss any of the announcements in more detail, please get in touch with our friendly team or call us on 0115 950 3044.

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