We know that a large number of tax changes are already pencilled in to apply from April 6.
National Insurance for the self-employed
The self-employed will pay more in Class 4 NI contributions from April 2018 – the rate will rise by 1 percentage point to 10pc, the Chancellor announced today. The abolition of Class 2 contributions will not be reversed.
The tax-free dividend allowance is to be cut from £5,000 to £2,000 a year, with Mr Hammond arguing that the greatest beneficiaries of the perk are either director-shareholders or wealthy savers with share portfolios worth more than £50,000.
NS&I savings bond
The Chancellor confirmed that a new bond will be available from April, paying 2.2pc on savings of up to £3,000. The income will be taxable, although the personal savings allowance will apply.
The key form of tax for almost everyone – from employees to the self-employed, pensioners and savers – is income tax.
At the moment everyone pays tax on earned income above the current “personal allowance” of £11,000.
From April 6 this year (the start of the new tax year) it’s already been promised that this allowance will rise to £11,500. This will take hundreds of thousands of people, including many pensioners, outside the income tax bracket altogether.
This promise poses a high cost to the Exchequer.
Higher-rate tax is currently due on earnings of more than £43,000. Again from April 6, it’s been promised that this threshold will rise to £45,000.
But Mr Hammond’s predecessor, George Osborne, went further, and promised that the threshold would rise to £50,000 by 2020. Will that promise be kept?
Another change that’s costly to the Government – and was announced by Mr Osborne – is the extra inheritance tax allowance that begins to apply from April 6.
It applies to family homes that are bequeathed to “direct descendants” (children or grandchildren).
When it fully applies, the new allowance would effectively enable a well-off couple to leave £1m to their heirs tax-free. That was a long held aim of the Conservatives, first set out by David Cameron.
But the policy has attracted a lot of criticism, partly because the implementation is highly complex.
Will Mr Hammond alter the arrangements – or confirm them as they are?
Pension savers are still learning to cope with dramatic changes announced by Mr Osborne in 2014 and introduced in April 2015. These were aimed at allowing savers to use their pension “like a bank account”.
In the meantime, the principal attraction of saving into a pension, which is the fact that the Government makes generous top-ups in the form of tax-relief, remains in place.
These tax breaks are extremely costly and Mr Osborne made several moves that reduce the benefits of pension saving for top earners.
Will Mr Hammond raise the possibility that tax relief may be reduced for middle earners too?
Isas and other tax-incentivised savings schemes
There are now five types of Isa and a sixth – the Lifetime Isa – is due to become available on April 6.
Mr Hammond is not expected to change popular Isa arrangements. But he might follow in Mr Osborne’s footsteps and tweak Isas further as a way to deliver other objectives, such as increased home ownership.
Buy-to-let and property tax
One area where the previous government had moved to increase tax related to residential property.
From April 2016 an additional rate of stamp duty applied to buyers of second homes, buy-to-lets or other “additional properties”.
From this April – when the new tax year begins – a further change takes place, which will limit landlords’ ability to offset mortgage interest against their rental income. This change is being phased in over four years.
Many landlords have switched to own their properties via a company, which enables them to avoid the loss of the tax relief.
Could Mr Hammond now extend the loss of this tax relief to companies, thus capturing landlords who are using this loophole?